---

The Government have been generally dismissive when concerns about split wards and crossed local authority boundaries were raised in the other place. They said that people would not care if their ward was split between different parliamentary seats and that it did not matter if council borders were crossed. I am absolutely sure that nobody is talking about this at the moment; it is not an issue that has grasped the public. But that does not mean that people would not notice the change or that it would not have negative consequences once the change arose. Split wards would give rise to confusion, at least among members of the public who live in them, with their MP being in one place and their councillor in another. Including parts of two or three local authority districts in a single parliamentary constituency would surely make life more difficult for a Member of Parliament and undermine the service that he or she is able to provide to constituents, as my noble friend Lady Smith of Basildon, recounted to the House last week. This was the point that psephologist

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Professor Ron Johnston emphasised to the Political and Constitutional Reform Committee when it took evidence on the Bill. He said:

"The issue is whether it is important particularly for administrators and for parties and MPs, and I am sure it is, because the fewer local authorities you have to deal with the better".

He said that a rule contained in the Bill referring to England,

"only includes some of the types of local authorities. It has gone back to the old wording of the previous Bill and only the boundaries of counties and London boroughs shall be taken regard of. Why not take regard of the unitary authorities as well? Why not take regard of the metropolitan boroughs or principal authorities? It seems to me that the Bill is deficient there and I wonder if that clause was not written in haste simply taking something from a previous Bill and it would be better to reconsider that. Wherever possible give an MP as few local authorities to deal with as possible".

These administrative confusions would also create significant problems for political parties at a structural level, especially in the case of the Conservative and Labour parties, which are organised on a constituency and ward basis. Professor Johnston informed the Select Committee that one academic study had shown that,

"when a ward was split a lot of the ward activists drifted away. They had lost their rationale to represent this place, this place no longer existed, it was in two parts and political activity declined".

I do not think that this is what any of us wish to see. The overall stated purpose of these Bills is to revive trust in politics, not reduce interest in politics. As it stands, this Bill is not a formula for increasing political activism and public engagement; it appears to be a recipe for undermining it. An aspect of the Bill that has not come under enough attention is the extent to which political parties at grass-roots level will be undermined by the boundary reforms set to be unleashed by these new rules. In particular, the requirement to have boundary reviews on the basis of the inflexible new rules every Parliament will produce much greater disruption than we have been used to. To quote the secretaries to the Boundary Commissions-I promise for the final time:

"Strict electoral parity, and a fixed total number of constituencies, will result in frequent constituency redesign".

That will mean very great organisational challenges for local party machines which, in the end, are run by volunteers. Something that we may have learnt over the 13 years in government was that reorganisations of state providers meant that there was a focus on the reorganisation and not a focus on the provision of the central purpose of those organisations.

Amendment 71A is aimed at providing some solidity to the boundary review process-a better balance to the process for drawing constituencies, and a greater understanding about the potentially damaging knock-on effect of the rigidly mathematical framework to which the Government currently adhere-but does it in such a way as to accept the principle that there needs to be much greater mathematical consistency between constituencies. The Bill is right to stipulate that parliamentary constituencies should not cross national borders, and we do not propose to touch that rule, but we do propose to bolster it with a further rule that says that constituencies should not cross the electoral regions relating to the European Parliament. The Bill itself suggests that the Boundary Commission should take

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those regions into account. We would go a bit further, in a sensible move that would give future boundary reviews a stable framework within which the processes could unfold.

The other elements of our amendment would provide a clearer requirement that administrative units and boundaries in the four parts of the United Kingdom, in particular the ward boundaries in England, Wales and Northern Ireland, should be respected and given proper account when parliamentary constituencies are being created. I very much hope that the Government will treat these amendments in the spirit in which they are addressed-namely, recognising the need for greater numerical equality but, equally, trying to build on the importance of communities and to ensure that political activism and focus is on the things that really matter to the people that politicians are supposed to serve.

Lord Davies of Stamford: I congratulate my noble and learned friend. His amendment has achieved a very elegant solution to the problem that we were concerned with under the last amendment, and it is a very important step forward. If this amendment were passed, would he agree that we would still need to look very carefully at the 5 per cent rule and replace it with the 10 per cent rule? If that were not done, the Boundary Commission could not have regard to the criteria that my noble and learned friend rightly wants it to have regard to, because it would conflict with the very narrow 5 per cent rule?

Lord Falconer of Thoroton: I agree with the last point from my noble friend Lord Davies of Stamford. Increasing the figure to 10 per cent would make it much easier as a matter of practicality to do what the amendment would do, and the independent research that has been done by bodies such as Democratic Audit also suggests that that 10 per cent flexibility does not lead to unacceptable differences between constituencies that might be said to favour one party over another. We can achieve the purpose that the coalition sought to achieve and preserve communities in a way that most contributes to effective political activity.

I hope that the noble and learned Lord, Lord Wallace of Tankerness, who will be replying to this because he is completely alone on the Front Bench out of the team dealing with this, takes the amendment in the spirit in which it is offered and gives us a favourable response.

Lord Foulkes of Cumnock: My Lords, I want to make a brief intervention, encouraged by the very positive response from the noble and learned Lord, Lord Wallace of Tankerness, to the previous debate. We are talking about very much the same subject here. I make this intervention on one issue only: the question of political party organisation. This is, perhaps, a direct plea to the noble Lord, Lord Rennard, who I know is an expert on this. I think that he told us on one occasion that he became secretary of his local ward party at the age of seven. He has moved onwards and upwards ever since.

When we are talking about trying to get boundaries as coterminous as possible, we are not just talking about community cohesion-although that is important,

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as my noble and learned friend said-about trying to reduce the public's confusion over who their elected representatives are or about keeping to a minimum the number of local authorities or health boards that MPs have to deal with. It is also vital in relation to political party organisations. Political parties are absolutely essential to democracy. When I go around in seminars organised by the Westminster Foundation for Democracy, I explain to new democracies in eastern Europe and north Africa-I have been to Macedonia and to Egypt to talk about this-the importance of having active political parties with good organisation.

The experience in Scotland has been that, because in both Ayrshire and Edinburgh, the two areas that I know best from a constituency point of view, we have ended up having different boundaries for the Scottish Parliament and the UK Parliament-the noble and learned Lord, Lord Wallace, was lucky in this, because Orkney and Shetland have been given special treatment on so many occasions-great difficulties have been caused in terms of party organisation. It really has confused people and made things more difficult.

The kinds of things that are difficult are, for example, fundraising activities. As my noble and learned friend Lord Falconer said, political parties are run by volunteers. When you get them in, they are not paid in most cases, apart from national organisers, but they are the ones organising the coffee mornings. At this time of year, we should perhaps think as well of the Burns suppers that are taking place to raise money. There are Labour Party Burns suppers around the whole of Scotland at the moment. All those kinds of activities are much more difficult if you have different party structures. If you have to have a ward structure or a local liaison group for another party organisation, as we have in Scotland-we have a CLP and a regional party structure-it makes things very difficult. People can spend hour after hour organising just meetings and minutes for meetings. They are trying to get things organised within their party structures rather than doing the fundraising.

Parties should also be involved in political education. We should be having much more political education run by the parties, getting young people in and getting them to understand what democracy is about, as well as what our parties are doing. It is therefore vital that we should not strangle or snuff out this voluntary political activity by a complex overlapping of boundaries. That is why I hope that the noble and learned Lord, Lord Wallace, will be as sympathetic to the proposal in this amendment as he was to the previous one.

5.45 pm

Lord Grocott: My Lords, I am not sure whether my noble and learned friend's amendment is the best way to encapsulate the basic philosophy of this part of the Bill, as far as this side of the House is concerned. It has to be acknowledged that that philosophy is very different from the philosophy of the side opposite. However, the amendment is certainly an attempt to do what is, surely, consistent with our philosophy, which is that the best way of determining constituency boundaries is broadly to follow how it is done at present. That is to say that it should be on the basis of guidelines-and they are guidelines-within which a

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Boundary Commission, in public consultation with local people, determines what the boundaries should be. To me, that is a flexible way of determining boundaries while totally accepting that one of the key factors ought to be, as the Government keep insisting, having as close to equality as we sensibly can get in the electorate in each constituency. Essentially, however, it is a bottom-up system with flexibility.

I find all this pretty astonishing. The Liberal Democrats and the Conservatives are, I acknowledge, in their different ways normally on the same rhetorical side, at least in these arguments, and say that they do not agree with top-down solutions. How many times have I heard that on other subjects, not least the health service at the moment? The Liberals pride themselves on localism. A great chunk of the coalition document is about the importance of localism and local communities.

Lord Tyler: My Lords, how does the noble Lord, Lord Grocott, manage to suggest that the amendment to which he is speaking is not a top-down solution and is not prescriptive, if he looks at its proposed sub-paragraph (2)(b)?

Lord Grocott: What, that,

"no district or borough ward shall be included in more than one constituency"?

In my book, that comes under the great heading of common sense. I recommend that to the Committee as being splendid. It is not exactly severely top-down and not nearly as top-down as what is in the Bill, where, irrespective of boundaries, the history of communities, mountain ranges or rivers-if we had any deserts, they would no doubt be subdivided into several constituencies-there is what I call a top-down solution, which aims simply at precise numerical conclusions.

There is no doubt about where I think the determinations of our boundaries should come from. It is precisely as I have described. However, an essential ingredient of it-we are not yet there in the Bill and I am certainly not going to talk about it now-is the crucial importance of local inquiries in which local people can participate. I have sat through nearly all our proceedings on the Bill and, as ever, my noble friend Lord Rooker has encapsulated why we are where we are. As he rightly said, it is the certain knowledge that we are not going to have these local inquiries that makes this Committee stage so important. This is the only point at which sensible local opinion can be expressed at a national level.

I am sure that some will correctly and energetically argue that the views of local people should be taken into account. I dare say that the noble Lord, Lord Tyler, will do so when we come to the debates on the county boundaries in Cornwall. Like everyone else in this House, I have been getting lots of e-mails and messages from people in Cornwall and there is almost an air of desperation in them. I was prompted to think that by the comment of my noble friend Lord Rooker- that this was essentially the local inquiry going on now, precisely because the people of Cornwall know perfectly well that, if we decide in Committee that county boundaries will be ignored, this will be their

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last chance to have anything sensible to say about that. To me, that is an indictment of the approach that the Government are taking, which is-I know that they will deny this and find ways of explaining it-essentially to end local community involvement within flexible rules, not within rigid rules, to determine local constituency boundaries. I plead for more flexibility.

I will not trespass too far on to other legislation, but when I thought about it I realised that this desire to make all the rough edges smooth, to apply a straitjacket to our constitution and to make it all work according to rigid rules seems to be an almost pervading view of the Government in a lot of the constitutional legislation that they are bringing forward. I do not know whether that goes right across government. In fairness, the Liberals have been quite consistent about this, but we are now saying that constituency boundaries should be very rigidly drawn and shortly we will be told the dates of all future general elections-presumably until the sun swallows up our planet. Every five years there will be a general election, come hell or high water, on a precise date. There will be no flexibility. I will not go into those arguments, but, my word, I will want to develop them when we reach the Bill about fixing the term of Parliaments.

I think that I am right in saying that the Liberal Democrats are very keen on us having a written constitution, which will lay all these things out and, of course, lead to the interpretation of the rules being adjudicated on by the courts. The beauty of a lot of our electoral and constitutional arrangements-this certainly applies to the drawing of constituency boundaries-is that they have been flexible. They apply the greatest principle that you can apply in any constitution, which is the principle of common sense. They allow for rough edges not to be smoothed out. This is particularly true in the case of the four nations that are the constituent parts of the United Kingdom. We all know that it is a slightly unusual arrangement, whereby one of the four countries totally dominates all the others numerically, but there are all sorts of accommodations, one of which we shall come to later, in respect of Wales, which is severely affected by the Bill.

I cannot write a constitutional doctrine explaining how the British constitution operates in relation to the four constituent parts of the United Kingdom, but I can say that it has worked pretty well, that people are pretty free within it and that they understand the system in which they operate. If there are a few anomalies here and there, so be it. I fear that what we are seeing in the Bill in relation to constituencies and constituency boundaries is yet another step along the road. I may be alone in this; I have been called a constitutional conservative by the noble Lord, Lord McNally, who, sadly, is not here. If that means someone who believes in common sense in the operation of the constitution, then I plead guilty. My noble friend's amendment passes the test of common sense for me. It allows flexibility locally and that is why I support it.

Baroness Farrington of Ribbleton: My Lords, I noticed that the Minister did not respond to the question that I asked him and my noble friend Lord Bach about whether the flexibility regarding numbers that has

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already been determined by your Lordships' House, with the decision on the Isle of Wight, will be allowed to affect the number referred to by the Leader of the House, the noble Lord, Lord Strathclyde, as "a nice, round figure". It is important that we should know that when we are debating different views about the terms on which new constituency boundaries will be drawn.

I make the passing comment, in light of my experience in local government, that it is not only for MPs to be able to work with the local authorities in their area. My noble friend Lady Henig, who was on Lancashire County Council at the same time as I was, will recollect that there were many occasions when we sought to influence our Members of Parliament serving Lancashire. There could have been difficulties had the boundaries of those constituencies crossed county boundaries. On the whole, we had a good working relationship, to the point where, on one unique occasion, Dame Elaine Kellett-Bowman lobbied me to find a way around the ban by her right honourable friend the Prime Minister, Margaret Thatcher, on our giving children free school milk. That remains a unique memory for me. Dame Elaine Kellett-Bowman was very concerned at that time about EU milk subsidies.

The sense of locality among political activists is important. There is a mistaken belief out there in the country that the political parties have thousands and thousands of political activists who ought to knock on their door every time there is an election. If we can do anything during the passage of the Bill to explain that it ain't necessarily so, it would be a good thing. I remember knocking on the door of one Labour supporter in a county council election and being told, "I have been waiting 10 years for someone from the party to knock on my door". I said, "That is because you, as a party supporter, are not out knocking on doors". He said, "What do you mean?". I said, "Tonight, there are about 18 people out". This was in what was then the borough of Preston. The public will not understand the debate about the importance of place in terms of political activists, but your Lordships will, from experience.

The sense of place and of belonging is critical. In my experience, having lived in London, Shropshire, Staffordshire, Lancashire and Leicestershire-I was born in Leicestershire-the sense of place in the major conurbations is less, particularly since the abolition of the GLC, although I found, when talking to schoolchildren there, that the sense of place of West Bromwich overrode the new title of Sandwell. The sense of place is critical in building political interest, activism and co-operation around a community, not only within the parties but between the parties. The sense of place matters and in that context, and because of my previous experience-this is a former interest-as leader of the Association of County Councils for England and Wales, I have to say that certain parts of the country, such as Wales and Lancashire, have a very strong sense of place.

My noble friend Lord Grocott made the point that this is the only opportunity to debate these issues, because the Bill deprives local communities of the opportunity to put their case. As somebody who has attended most of our proceedings on the Bill, I feel bitterly resentful that I am accused of filibustering for

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being here and debating this, when I would very much like to go home, because the Government have conceded that local people could do the job that we are attempting to do here. I am surprised, although I intend no discourtesy to the Minister, that the Liberal Democrats are giving up the opportunity that, in our experience, they have taken so often in the past to make a very full presentation at a public inquiry into constituency boundaries at local level. If we want an active democracy, people need to feel that they are part of the system that creates the constituencies and determines boundaries. The Bill is going in absolutely the opposite direction.

I shall sit down now, but I shall come back to this subject in other parts of the Bill. The Minister may go away and think that my speeches are not necessary, but he could stop them at any point by accepting that the people in the areas that I have referred to and lived in-Leicestershire, Lancashire, Staffordshire, Shropshire, Wales and London-can make their own case, because this is not the place where that ought to be done.

6 pm

Lord Graham of Edmonton: I am tempted to enter this debate because the premise that the constituency is important has a slight flaw. Every constituency has a number of wards. I first became a councillor 50 years ago this year, and my experience is that the best discussions that I have taken part in have been with 10, 12 or 15 people in someone's house. We did not masquerade; we were proud to say that we were a ward and we dealt with the issue. Every issue in a locality-a constituency-has a resonance in a part of the constituency, whether it is a road pattern, a development, a school or the closure or opening of something. The ward level is very important.

Having taken part in this debate and listened to colleagues, I congratulate them on bringing their experience here and on not being put off by the shaming fact that, as I detect, that experience is seen in some places as irrelevant. We have the opportunity here to remind the Minister-rub it into him, if you like, without being offensive-that there are people out in the field who will be affected by this.

The Minister and his colleagues have made great play of the big society and localism. However, in this Bill they are not paying attention at all; democracy grows and is stimulated by events and individuals. We could all in this Chamber look back on where we made a big move on to a council, into its leadership, into Parliament and so on, but it all stems back to a handful of people who represented the Labour Party, the Tory Party or the Liberal Democrat party, not in a big way but in a small way-and that is the way they want it. Those of us who have an ambition to serve at a higher level have the opportunity to do so, and everyone is here only because they have given service to their party in one way or another. Thousands of people serve the democratic principle from a very low base.

I say simply to Members opposite-I cannot say that I am replying to what they have said because I have not heard what they have said, except the Minister-that they ought to pay serious attention to the impact of the Bill at the local level if it is carried out, because it will damage our democracy.

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We all struggle, not just within the Labour Party but in all parties, to maintain democracy. Issues come up that affect the constituency, and then you get local headlines and so on. So far as I am concerned, though, the Edmonton Labour Party that I served, and still have great connections with, has gone through a series of changes in its organisation. From having eight wards it is now down to four because of the change in the demographic profile of the constituency. It is that level, around someone's table in someone's house or in a back room, that I am talking about. Last Saturday I went along to the annual meeting of the Edmonton Co-operative Party, an organisation that is affiliated with the Labour Party. There were 20 people there, serious players in the political game. They might not pull many strings or be able to affect a lot, but there were 20 of them on a Saturday morning, from 11 o'clock to past 1 o'clock, who came along and were moved to discuss the issues that affected them.

I support the amendment. I hope the Minister is able to say something that will be helpful to the mover of the amendment, because unless there is a change to the policy of the parties opposite-in general, but particularly on the Bill-we are going to be worse off in the future than we have been in the past.

Lord Howarth of Newport: My Lords, every noble Lord who has so far spoken in this debate, and indeed in the debate on the previous group of amendments, has put forward the view that it is highly desirable that parliamentary constituencies are aligned as far as possible with local authority boundaries.

The only noble Lord who has demurred from that to any extent is the Minister, the noble and learned Lord, Lord Wallace. He did not deny that, all other things being equal, it would be desirable, but unfortunately he makes the factor of numerical equality between constituencies paramount. He therefore spoke of there being a conflict of factors with which the Boundary Commission is obliged to wrestle. I would not put it in those terms; I would say that there is a tension between a variety of legitimate factors-numerical equality, community, history, geography, and of course alignment with local authority boundaries. The Boundary Commission's task is to do its best to reconcile those factors to arrive at a judgment that holds them in an appropriate balance, as my noble friend Lord Grocott stressed, in consultation with local people. The present system is a good one, and it seems reckless to upset it in this way.

Local authority areas, like constituencies, ought to contribute to defining and expressing people's sense of their local community. That is a point that we have been arguing and no doubt will continue to argue in proceedings on the Bill. Unfortunately, they are too much discounted in the Bill. If members of the Government consider that questions of identity-people's sense of who they are and where they belong-are negligible considerations in politics, I respectfully suggest that they are seriously mistaken. Indeed, any system of parliamentary representation that systematically discounts those emotions within our national life will not last. Supposing that the Government are successful in legislating to bring this into effect, the system of

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frequent boundary reviews, within the straitjacket of numerical equality that the Government are designing, might work once or even a second time, but I fancy that after the 2018 boundary review the people of this country will say, "This won't do". I very much doubt that the system will survive, should it be legislated, and we will do our best to persuade the Government that it is not, after all, a very good idea.

The Government ought to understand that themselves. As my noble friend Lord Graham of Edmonton just mentioned, the Government make much play of localism and the big society, but how can you seriously advocate the virtues of those things if at the same time you design your political structures to inhibit and distort localism and disregard people's own sense of where they take their place within society?

If the Government think that these considerations are too sentimental or imprecise, I appeal to them at least to consider the practicalities of the working relationships between MPs and elected members of local authorities. My noble friend Lady Farrington wisely advised the Government to look at this from the point of view of local authorities. The reality is that local authorities take decisions overwhelmingly within a context of policy made by central government-of legislation and policy emanating from Whitehall and Westminster. Unfortunately, we have a highly centralised system of government in this country. Indeed, until we have radical decentralisation and greater autonomy for local government in this country, we will continue to need more MPs.

That is partly because so much policy-making and legislation comes from the two Houses of this Parliament; therefore you need an adequate number of Members of the other place to do justice to the policy-making and legislation. It is also partly because local authorities, rather than being free, as they ought to be, to get on and do their work on behalf of their local communities, must endlessly look to the centre for authorisation and make representations to the centre to see whether they can persuade officials and Ministers to modify their policies so that they make more sense for their local concerns. Key intermediaries in that process of frequent negotiation between local and central government are local Members of Parliament. It is therefore very important, in practical working terms, that Members of Parliament have a satisfactory operational relationship with their colleagues and counterparts in local authorities.

Equally, it is very important that elected members and officers of local authorities know to which Member of Parliament they should turn. It is better, therefore, if the constituency boundaries can be drawn so that whole local authorities are contained within them. Local authorities then know exactly which individual Member of Parliament they need to work with. The more MPs they have to deal with, the more confusing, expensive and time-wasting it is for people in local government. Equally, the more confusing and difficult it is for Members of Parliament to maintain the kind of working relationship that they need. Neither the local authority nor the Member of Parliament should need to duplicate, triplicate or otherwise multiply representations, meetings or the dialogue that they have with their colleagues at the other level of government.

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A Member of Parliament should champion the place he represents. He or she can champion a local authority area if he or she has a clear-cut relationship with that local authority area. How much more difficult it is for a Member of Parliament convincingly to champion a hotchpotch of different local authorities that happen to fall within different parts of his constituency.

Lord Grocott: What on earth would happen in a constituency that, let us say, crossed county boundaries, where counties could take diametrically opposed views on major regional planning issues, or on school placements and applications to different schools? What on earth does the constituency Member of Parliament do in representations to central government on that? He will seriously let down half his constituency if we go by these rigid rules.

Lord Howarth of Newport: My noble friend is absolutely right. I was just about to make that point; the Member of Parliament is liable to be conflicted if he owes equal loyalty to different local authorities, which might themselves be at odds on important policy issues. Under the provisions of the Bill, as my noble friend suggested, it would be difficult for a Member of Parliament to deal with elected county councillors in two different counties that overlapped with his constituency. In the previous debate I quoted Dr Lewis Baston on the danger that, with the narrow 5 per cent tolerance-or, as the Minister likes to call it, a 10 per cent tolerance: both ways from the norm of 76,000 voters-wards would all too frequently be split.

6.15 pm

Equally, there will be all too frequent occasions on which constituency boundaries have to cross county council boundaries. Again, to quote Dr Baston:

"In the Democratic Audit model of how boundaries could be drawn using a 5 per cent rule, only 9 out of 46 counties, accounting for 67 of the 503 seats proposed for England, did not need to be grouped with another county (North Yorkshire, Humberside, Lincolnshire, Cumbria, Staffordshire, Gloucestershire, Berkshire, Oxfordshire and Buckinghamshire). Furthermore, relatively small future changes in electorate size would lead to disruptive change to the county groupings every parliament. A 10 per cent tolerance of variation would transform this chaotic picture",

and vastly for the better. This question of a 5 per cent or 10 per cent tolerance connects absolutely inextricably with the issue of alignment with local authority boundaries. It is very important that we do not make a mistake by legislating so tightly that we break the existing pattern of good working relations as it largely prevails between Members of Parliament and local authorities; and fragment constituencies between different local authorities, making for a far more complex, even chaotic, pattern-if you can call it that-of relationships.

That matters very much for the constituents of both ward members and Members of Parliament. We all know that in Members' constituency surgeries cases are brought to them that, in principle, ought to have been taken to the ward member. Sensible, practical, fluid relationships between Members of Parliament and their colleagues in local government, in the service of their shared constituents, are very precious and

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important within our system. It will be made more difficult if we see the sort of fragmentation that the Government seem willing to contemplate.

The same applies to voluntary organisations, which are part of the warp and weft of our democratic life, activism and citizenship in the healthiest way in our constituencies. It is unfair on voluntary bodies to require them, often with very limited resources and hard pressed to do the tasks that they do in the interests of their communities, to have to relate to a much more complex cat's cradle of elected representatives than need be the case.

What lies behind our concern on this side of the House to ensure that this legislation allows for the continuation of a sensible and workable pattern of relationships between local authorities and Members of Parliament is respect for local government. Local government in this country is too weak. If it is to become ill-assorted with Westminster representation, it will be bad for our democratic culture. As my noble friends have stressed, the ward is the building block and basis of our democracy. The Minister and Mr Nick Clegg have both paid lip service to the importance of the ward as that building block. We must allow it to be a reality. Unless we make it realistic and practical for political parties to organise at ward level, and then to campaign both for elections to local authorities and elections to Westminster constituencies, we will vex, confuse and undermine the operation of local authorities. It will be made worse if there are to be boundary reviews every five years and frequent shifts of boundary. Let us, for heaven's sake, not make the situation any more complex and tormenting than it need be for local political parties. For these reasons, securing a rational and reasonably consistent alignment of constituency boundaries with local authority boundaries, and minimising the occasions on which constituency boundaries traverse local authority boundaries, is well worth some compromise of the pure principle of numerical equality.

Lord Campbell-Savours: My Lords, I have in the course of my contributions over recent weeks tried to bring some fairly original material to our debates to help them along. I have often drawn on statistical evidence from various organisations. However, today I do not want to do that. I want to refer to a debate that took place-probably unknown to Members of this House-in the House of Commons on 11 January in Westminster Hall. I should perhaps start by explaining the relevance of Westminster Hall. It is a secondary Chamber in the House of Commons where the debates are of great importance and great interest, but where, for whatever reason, business managers in the House of Commons organise debates which very often attract fewer people. There was a particularly interesting debate that took place there on parliamentary representation. It was called by Mr Andrew George who is the Liberal Democrat Member for St Ives. The relevance of this debate was that it was the first time that many Members of the Liberal Democrat Benches in the House of Commons had had the opportunity to speak on Clause 11 of the Bill. Because of the arrangements in the House of Commons and the use of the guillotine and the truncating of debate, there were many issues which the

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Liberal Democrat Member of Parliament had been unable to raise. Indeed, he says at the beginning of his contribution:

"I am delighted to have secured the debate, which will explore many of the issues that we did not have an opportunity to explore during the passage of the Parliamentary Voting System and Constituencies Bill ... We failed to get to grips properly with the issues that needed to be debated to improve the Bill before it transferred to another place". - [Official Report, Commons, 11/1/11; col. 25WH]

Then, in an aside-I have to be straight about this-he blamed Labour Members in reference to the delay in debate. Obviously, there were areas of the Bill that we regarded as particularly important which the Liberal Democrats did not regard as important. I want to quote some of the things he and his colleague said, because they have not been considered by Ministers. The comments that were made in Westminster Hall had not been considered by Ministers when the Bill was taken through its Committee and Report stages in the House of Commons. Andrew George says:

"The Bill proposes that all constituencies have an electoral quota of approximately 76,000 with a margin of only 5% either way. It would carve up the country in a manner that would create bizarre constituencies and ignore important cultural, historic and geographic boundaries".

We have not heard those words mentioned by any Member of the Liberal Democrats here in the House of Lords. He goes on to say:

"We do not want antiseptic constituencies with perpetually mobile boundaries. The five-yearly boundary review that would happen between each Parliament would mean an MP's attachment to their constituency being perpetually reviewed, so the sense of settlement with the communities they represent would be continually undermined".

That has not been said by a Liberal Democrat Member in the House of Lords; it was not said in the House of Commons by a Liberal Democrat Member because they did not have the opportunity to say it. It was said in the junior chamber in the House of Commons, in Westminster Hall.

He then goes on to say:

"The amendments to the Bill which I and other hon. Members tabled were unsuccessful, in that they were not selected or therefore debated".

There are procedural differences in the House of Commons. Whereas here we can debate technically all our amendments, in the House of Commons they have to be selected by Mr Speaker. If they are not selected, they are not debated. Even if they are selected they are not always debated because of the guillotine and timetable. He goes on about his amendments:

"They sought to find circumstances in which the Boundary Commission was given sufficient discretion to work towards the target figure, taking into account reasonable geographic, cultural and electoral issues. We want the Government to allow places to make decisions for themselves collectively, provided that they do not request more favourable treatment, such as over-representation",

which we accept.

"I hope the Minister takes note of that. It is not about more favourable treatment but simply recognising the distinctiveness of places, which the Bill does not take into account". [Official Report, Commons, 11/1/11; col. 26WH]

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Why has no Liberal Democrat Member of the House of Lords got up to their feet and repeated a statement of that nature to this House? Never once in our debate-someone said that we have now been debating for 90 hours-has that point been made by a Liberal Democrat Member of the House of Lords. I can tell you what the answer is. There is a contractual agreement within this Chamber between two elements of a coalition; that agreement is silencing debate. It is completely undermining the very ethos of this Chamber in the House of Lords.

A Conservative Member-obviously a very courageous one-a Mr Martin Vickers of Cleethorpes, said in the same debate:

"Continually changing boundaries will impact on the vitality and sustainability of local political parties. The democratic process needs viable local parties and associations, but constant boundary changes inevitably impact on their viability. Taking one ward out of a constituency can render the local party virtually bankrupt if the ward's financial make-up means that it contributes greatly to the party. We need to think seriously about that".- [Official Report, Commons, 11/1/11; col. 26WH]

And so we do. Why are not Conservative Members of this House getting up and arguing the case that is being put in Westminster Hall in the House of Commons? And then, later in the debate, Mr Andrew George says that,

"the boundary of my constituency changed at the 2010 election and those constituents who used to live in my old constituency still contact me. Given the arrangements in the Bill, that sort of thing would happen at every election, so there would be confusion". -[Official Report, Commons, 11/1/11; col. 38WH]

And how right he is.

Let us take a town on the margin of a county, on the margin indeed of a constituency, that switches from one election to another between Members of Parliament, where the electorate do not actually know who their MP is, because of this constant change and movement as the Boundary Commission somehow has to find a way of ensuring that constituency boundaries fall within this 5 per cent limit which we would wish to extend to 10 per cent.

Take a county like Cumbria, and let us take the town of Kendal. Kendal was not in my former constituency but it was very near the county boundary; a beautiful town on the fringes of the Lake District. Indeed, the people of Kendal would say that they were part of the Lake District. There is a possibility that within the terms of this Bill that town might be split.

I know that Members of Parliament with large city seats very often find that their cities are split. It will work in a large city. It will work in a large community, but it will not work in a small community. It will create divisions within that area-divisions inside parties, between officials inside parties, between treasurers, secretaries, chairmen-all kinds of unseen divisions that boundary commissioners when they are taking their decisions about the future of constituency boundaries would never at any stage be aware of. Those are the kinds of issues that might well surface during the course of an oral inquiry. But the Bill goes on to take away the opportunity for such a forum to examine the minor detail of what would happen in the small

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community, a town like Kendal, in the event that it were split in the way that the Bill might provide for in the end.

I have a lot more to say on these matters, but I shall save my words for later in the evening-indeed, the night.

Lord McAvoy: My Lords, I would like to give some practical examples of what my noble friends have been describing here. I know that some folk do not like practical examples, but this is what this House is for; to listen to each other and to learn from each other. I am still on a learning process.

The point about wards being the building blocks is illustrated in the former constituency I represented. It illustrates the folly of tinkering with political systems because a party is part of a coalition. That is what happened to the Labour Party in 2004 in Scotland and the Scottish Parliament elections where the Liberals put as a price for joining a coalition the introduction of proportional representation to local government.

I can advise any coalition party involved with the Liberals that in the long run they will tinker and tamper with PR to your detriment and downfall. What happened at the local elections was a disaster, but we have already discussed that and I do not want to be accused of or be guilty of repetition. A multi-member ward system was introduced.

6.30 pm

Two wards in my former constituency, Earnoch and Burnbank, are each represented by three members. I am not making a political point, because three members in one ward are all Labour, and in the other at least two are Labour. Part of those two wards is in Rutherglen and Hamilton West, and the other part is in Lanark and Hamilton East. They are divided by Woodhead Road. One side of the street is in one constituency; the other side is in the other. I can see that applying to constituencies, but it is not right for wards to be divided in that manner. These wards are split between two constituencies. I know that this will sound like special pleading, and folk will say that it does not matter because the public come first. The public come first surely by allowing political parties to organise in an efficient and representative manner. No one should dismiss the difficulties facing party organisations in trying to get their policies across to the public and being elected as representatives. Party organisation cannot be dismissed as irrelevant or unimportant, as compared to the public interest, because I would maintain that the public interest is served by efficient political structures, which will ultimately be better for the public.

We have these areas in which there are two constituencies. While my relations with my colleague, neighbour and friend Jimmy Hood, the MP for Lanark and Hamilton, were okay, the situation was nevertheless disjointed. I do not want to spend too much time on that, because I have dealt with the issue of what happened when constituency boundaries were split, and the town of Hamilton was split on a purely numerical basis. The community of Hamilton has been badly damaged because it is not one cohesive unit. I have complained long and hard, and will continue to complain, about the effect of that on Rutherglen,

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but after watching what happened to Hamilton, the natural result has been that the community does not feel that it is properly represented by one cohesive voice in Parliament. Boundaries count. In the memorable phrase of the noble Lord, Lord Forsyth of Drumlean, if this goes ahead without any alteration, we will have "blocks on a map".

I intend to deal with one particular block on a map in a later amendment in my name. I will take head-on this argument that constituencies are just blocks on a map. I know that former MPs are not very popular in your Lordships' House at the moment. We seem to be a hunted species; but there we are. We will do our best to bear up and learn our trade in here. However, I am determined to try to make a difference and ensure as best I can that Rutherglen will not become part of a block on a map.

Lord Foulkes of Cumnock: Can my noble friend remind me about the boundaries of the Scottish Parliamentary constituency represented by James Kelly, and about the former boundaries of Rutherglen? My recollection is that the situation is similar to what happened in Ayrshire and Edinburgh, whereby the boundaries are now not the same, and there are a number of problems; MSPs have to deal with a number of MPs, and MPs have to deal with a number of MSPs.

Lord McAvoy: I thank my noble friend, because that is the next item on my little list. Again, Labour has given in too much to Liberal machinations and fascinations about systems. Last week, I mentioned that we kept on being told that the Scotland Act was supposed to be the settled will of the Scottish people. The Scotland Act stated that the number of Westminster constituencies should be reduced and that the number of Scottish parliamentary constituencies should be reduced in tandem. That did not happen, thanks mainly, but not entirely, to Liberal pressure. Now the Westminster constituency boundaries are not coterminous, and I notice the Minister expressing satisfaction at that for, I am sure, purely party interests. He is motivated to do that.

There has been a disjointed effort to try to cope with that in terms of party organisation. Rutherglen and Hamilton West now has the entire Rutherglen Scottish parliamentary constituency within it, although the people of west Hamilton feel that they are being just moved about as part of a block which seems to be favoured by the Minister. The people of west Hamilton have been shunted away from the Westminster constituency boundary, and into the boundary of Tom McCabe's Scottish parliamentary constituency. James Kelly is getting down to work very well in what is to him a new place, High Blantyre.

I know this has been said before, and I apologise to anyone who thinks I am being repetitive. I am certainly not filibustering. I can assure colleagues of that. I am not thin-skinned and sensitive, but I would not get away with it. It is surely frustrating-annoying is too strong a word-to be told that you are filibustering when you are trying to get across the concerns of your constituency. At the end of the day, if any legislative Assembly does not take people into account or listen

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to them, we are all in a bad way. I make no apology for expressing my concerns about how this issue will affect my community, because I was born and brought up in Rutherglen, where I have lived all my life.

This continual five-year change in boundaries will be chaotic, if it goes ahead. In my experience in the other place, all political parties showed great faith in the link between the Member of Parliament and the constituency. There is a terrific bond. I do not say that to be elitist to colleagues on all sides of the House who have never been in the other place. Nevertheless, that bond will be broken. I return to the absolutely brilliant phrase of the noble Lord, Lord Forsyth of Drumlean, who said there will be just blocks on a map.

Chaos will be caused to the political parties, and that will be reflected in issues such as how best to represent people. I used to have people come to me from the other side; and, vice versa, Jimmy Hood had people coming to him from my side in Hamilton. The situation was particularly bad in Hamilton, because it was a town split in two, just to make up numbers. That is an example of a town of which I have a fair knowledge being split down the middle just to fit the numbers-end of story. That is surely wrong, and I cannot believe that every noble Lord on the other side of the House, or our colleagues on the Cross Benches, thinks that it is good not to take account of communities-especially given that this will happen every five years. At the end of the day, this is not simply about party mechanics and organisation to suit the politicians. It is about whether the proposals make the political structures and organisations fit enough to represent the people, stop the confusion and be a useful part of a democratic process in this country.

Baroness Hughes of Stretford: My Lords, like my colleagues, I think there are many problems with the Bill. The biggest problem is that the Government failed to consult local people before they dreamt up their proposals. I say that because in my experience as, I hesitate to say, a local councillor for nearly 25 years, as a leader of a local authority and as a Member of Parliament for 13 years, when faced with proposals that they feel cut across their sense of community and identity as a result of a boundary review, local people feel very strongly about some of the issues that the Bill relegates to secondary importance in favour of a rigid mathematical formulation. It is a great pity that the Government did not consult local people about these proposals before they put them forward because, had they done so, they would have come up with a different formulation.

It may be useful if I recount to noble Lords one such experience during those 25 years when the Boundary Commission made a proposal, which would be common with the measures in this Bill, to split my then constituency and form a new constituency in the Greater Manchester area of the north-west of England. The Boundary Commission's proposals during my period as an MP would have taken five wards from the north of my former constituency in Old Trafford, next to Manchester city centre, and linked them with four or five wards in the neighbouring local authority of Salford.

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At that time there were no straightforward bus routes between those wards in the different local authorities. To get there by car one had to go over the M60 motorway, and by public transport one would have to go into the centre of Manchester and out again to get from Trafford to Salford or vice versa. The reaction of local people to the proposal from the Boundary Commission was loud and vociferous; they rehearsed many of the arguments that my noble friends have put in this Chamber. It was not because the people of Old Trafford rejected the people of Salford or vice versa but because they already identified with different communities represented by the constituencies of which they were already a part-the Old Trafford wards were part of the Trafford local authority; the Salford wards were part of Salford local authority.

Those involved emphasised the importance of the communities in those areas; the differences between the communities in Old Trafford and in that part of Salford; they talked about the sense of identity and place to which my noble friend Lady Farrington referred; and they argued strongly that they wanted coherence of representation from both their local councillors and, particularly, their Members of Parliament. They wanted to feel that they shared the Member of Parliament who represented the whole area of which they were a part, and that that Member of Parliament and that constituency would reflect the history, the geography, the boundary, the proximity and other mechanisms through which people reinforce their sense of identity-local newspapers, schools and so on.

It is unthinkable that wards should be split across different constituencies by boundaries being redrawn. If noble Lords think through the implications of that for political parties, local people and local authorities, they may feel it would be a chaotic situation for all concerned. In building on wards it is important that local people should feel that they have got that sense of identity and coherence in the constituency as a whole. By and large, from my experience, I believe that where possible a constituency should contain a whole local authority and not be split.

6.45 pm

Those are the direct concerns of constituents, in my experience. A second consideration-my noble friend Lord Howarth touched on this-which indirectly is also important for local people, is how easy or more difficult it is for a Member of Parliament to do their job in the situation I have described. If that had come about, the Member of Parliament would have had to relate to two local authorities-Trafford and Salford; to two primary care trusts; to two major hospitals; and to two police divisions. Indeed, given the inability of people to go from one side of the constituency to the other because of the transport difficulties I have outlined, the provision of advice services across the constituency would be very problematic.

If you are a Member of Parliament you feel strongly that you want to do the best for your constituency, your area; you want to champion it; you want to chivvy at the heels of central and local government and of the government agencies that provide important services such as health, transport, security and policing. If you are doing that in relation to two different areas

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and you are doubling up on the number of bodies with which you have to liaise-which often have different interests, as my noble friends have outlined-you cannot do a proper job for either one of those places.

In the example I have given, the proposal by the Boundary Commission would have meant a much safer Labour seat for me, combining my safest wards in Old Trafford with Salford instead of with some of the other Trafford wards. However, that was not an important factor. The important consideration was whether we could end up with a recommendation that provided the coherence of community and identity that local people wanted and make it possible for the Member of Parliament to do a good job for that area.

I am happy to say that, as a result of the public inquiry, to which local people came in their droves unsolicited, and made all of these points and more to the Boundary Commission, the recommendations were changed and the principles of community and so on were upheld. That is exactly the kind of flexibility of judgment applied by the Boundary Commission to which my noble friend Lord Grocott referred.

As with many other such endeavours, the issue cannot be reduced to a simple mathematical equation when you are dealing with people and their sense of place and community, and when geographical barriers and idiosyncratic issues of history and geography are involved. I shall reserve my other arguments for later when further amendments come forward. I support the amendment.

Lord Touhig: I do not intend detaining your Lordships very long but I should like to refer to the impact that the legislation is having on Wales. As a Welsh Member of your Lordships' House I feel strongly about this because not one amendment about Wales was debated in the other place. The use of the guillotine ensured that none was debated and yet Wales is the part of the United Kingdom that is most adversely affected by the Bill.

Paul Wood, a member of the Boundary Commission for Wales, in evidence to the Welsh Affairs Select Committee in the other place, produced a report on the Bill and said that,

"issues such as local ties and historical ties, which may have had more weight previously, are clearly subsumed in the legislation to the numerical issues".

In other words, community-based representation will fail and disappear if the Bill is not amended. Indeed, the creation of large, rigidly defined constituencies based on numbers will put an end to it.

I think of my part of Wales, and the south Wales valleys in particular, as being like a hand: the valleys are the fingers and the palms are the cities of Newport, Cardiff and Swansea. There is movement from the valleys to the cities, but there is hardly any movement across valleys from one valley to another. That is historical and something that we have understood for many decades.

Perhaps I can relate my concerns on how Bill will impact on my former constituency of Islwyn. The Electoral Reform Society has produced a paper in which it has redrawn the electoral map of Wales based on 30 parliamentary seats. In its proposals my former

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parliamentary constituency of Islwyn would disappear, which would have certain consequences. Under the Electoral Reform Society's proposals, which could be a blueprint for whichever body follows, the community of Abercarn will be put into the new constituency of Caerphilly. Abercarn is in the Ebbw valley and Caerphilly is in the Rhymney valley, separated by two mountain chains and three rivers. They are distinct and separate and there is no community interest across the valleys. It is proposed that the community of Cefn Fforest will become part of the new constituency of Merthyr Tydfil. They are in separate counties and there is no community of interest whatever between the two.

Lord Grocott: I assume that the Electoral Reform Society's map was applied to the whole country, as we had the same in Shropshire. Was there anyone at any level of representation in the noble Lord's part of Wales, such as a local authority, who thought that the proposals made any sense whatever? No elected representative or official in Shropshire thought there was any sense at all in what the Electoral Reform Society proposed.

Lord Touhig: I am more likely to find someone recruiting for the band of hope in hell than to find anyone in my part of Wales who supported it. It will not happen, frankly.

The point that I am trying to get across is that there is not the community of interest that has to exist if we are to have huge constituencies based on numbers. If the Bill is enacted as it stands we will not need to employ the Boundary Commission to do this work. Anybody with a map, a pencil and an abacus will be able to draw up the new parliamentary boundaries. We might as well hand it over to the Flat Earth Society for all the good it will do for locally based parliamentary representation.

This is so important and fundamental, and it is a matter that I will return to perhaps at greater length when we debate the amendments affecting Wales that are in my name and those of other noble Lords. It is important to recognise that there are particular difficulties, especially across the south Wales valleys where simply having constituencies based on numbers will not work in terms of the community of interest. There will be no link whatever between the Member of Parliament and the constituent. That will be a retrograde step, so I hope that with those few remarks the Minister will get the impression of how strongly I feel, as do many people in Wales. I know how people on all sides, including Cross-Benchers, feel about this. Wales will be adversely affected in that 20 per cent of all the reductions in the number of parliamentary seats in Britain will be in Wales. It will lose one in four of its parliamentary seats as the Bill stands. That cannot be right and I will return to that debate later.

Lord Newton of Braintree: The last thing I want to do is extend the debate but somebody needs to say that the picture of idealised perfection that the Boundary Commission arrangements have had up until now, implicitly presented by some of the things that have been said, is simply not the case, especially in an area of rapidly expanding populations.

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I happen to have been a Member of Parliament a lot longer ago, admittedly, in the county of Essex which has had a rapidly expanding population and went through several boundary changes. I am bound to say that the constituency I represented included parts of two districts, Chelmsford and Braintree; it would have included parts of two PCTs, had they existed at the time; it related to two police divisions, to quote examples used earlier; and indeed, it had three different postal districts in its geography. I found not the slightest difficulty in representing all those parts and strands to the best of my ability. My former constituents might have views on whether I did it well or badly overall, but I found no difficulty at all in relating to both Chelmsford and Braintree councils and all the other bodies to which I referred. I do not think that we should have it presented, as some have, that the situation is a dreamworld without the Bill.

My other point is that the constituency that I represented has now been split into two and the two main towns within it are separate. Frankly, I think they probably like it as they were about the same size and there was a degree of rivalry so they are happy to be split up, even though they are still in the same local government district. One of them is now part of the constituency consisting of parts of three districts: Braintree, Colchester and Maldon. I do not believe that the new MP is having any difficulty representing all those parts of her new constituency. Let us not overplay our hand on this and recognise that there will be difficulties whatever system we have. There is a degree of flexibility in the Bill's proposals. Last week there were discussions about increasing that degree of flexibility. There is already enough flexibility to make it quite possible not to have the abacus concept that the noble Lord talked about just now.

Baroness Farrington of Ribbleton: Does the noble Lord agree that in the case of both the boundary reviews he spoke about, local people had the opportunity to say whether they were happy or whether, for example, they wanted the two towns to be split, whereas this Bill would not allow that?

Lord Newton of Braintree: I understand the point made by the noble Baroness, and it is yet another point that has been done to death. The suggestions that community is all, regardless of other circumstances, which has been implicit in quite a lot of what has been said, and that somehow this is death and disaster compared with the situation at present, are complete and absolute poppycock.

Lord Davies of Stamford: I have the highest regard for the noble Lord, Lord Newton, and I listened, as I always do, with great interest. However, I was not sure what central point he was trying to make. Was he saying that basically we should not worry about any of these things-to hell with local government boundaries, local loyalties and identities, and let us just have a computer divide the country into blocks of a certain identical number and spew out whatever the result is, irrespective of those things? Is that what he was saying?

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Lord Newton of Braintree: That was not what I said. I indicated specifically that the flexibility in the Bill, and the possibly greater flexibility that has been the subject of one discussion, would allow those factors to be taken into account. Of course, they are not to be dismissed but equally, with a reasonably fair voting system, they are not the be-all and end-all.

Lord Davies of Stamford: In that case the noble Lord is saying what I totally believe, which is that the present system is not all bad; it could be a great deal worse; and flexibility is of the essence in the role of the Boundary Commission. If those are the three principles that he was setting forth I could not have put it better myself. That is exactly what I think is the view of the majority of people in all corners of this House.

The Government have come in for a great deal of criticism over the past 90 hours, or whatever it is. I do not think we should have too much sympathy for them because they brought it on their head by going ahead with this Bill without pre-legislative scrutiny, as my noble friend Lady Hughes has just said. There was no attempt to consult local people at any stage. It is not an excuse to say that they had a deadline of 5 May and needed to make rapid progress because it was an arbitrary decision of the coalition to put the two Bills together. We have been over that several times. The Government have been subject to a lot of criticism but I do not feel sorry for them. However, I shall not add to that now. I want to be much more positive and move on.

The public would expect us in the Committee stage of such a Bill to do two things.

7 pm

Lord Campbell-Savours: I thank my noble friend for giving way. I was just looking at my notes because we had an earlier intervention on Maldon. The noble Lord, Lord Newton of Braintree, referred to Maldon. He is talking to the noble Lord, Lord Higgins, at the moment but he might wish to take note of this. Maldon has a very interesting history. It was referred to by Lewis Baston in his brief, which my noble friend will have received. However, the noble Lord, Lord Newton of Braintree, did not tell us that the boundaries were changed in 1955 to 1974, in 1974 to 1983, in 1983 to 1997, in 1997 to 2010 and in 2010 to 2015. The evidence from Maldon is that the people of Maldon are confused about what constituency they belong in because of all the changes over the past 40 years to the boundaries of the constituency in which they have been placed. It is rather strange that the noble Lord, Lord Newton, failed to refer to that when he commented on his own constituency.

Lord Davies of Stamford: I am sure that the noble Lord, Lord Newton, has heard and taken note of those remarks. I say to my noble friend with the greatest friendliness that I do not intend to try to turn myself into an expert on the electoral history of Maldon. I come back to the point that I was making, which is that I think the public in general rightly expect us in a Committee on a Bill of this kind to do two things. One is to explore to the full the details in the Bill to open up every possible angle of vision to ensure that we look

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through the consequences. It is very important in any Committee on any Bill to try to identify the possible unintended consequence or consequences of it.

On the whole, this House has done a job in that regard of which we can be proud. What disgraceful negligence it would have been on the part of this House if we had not discussed Wales at all, which my noble friend Lord Touhig has just mentioned, given that the other House has apparently failed to do so. Anyone who has read that wonderful classic of Welsh literature, How Green Was My Valley, knows that the mountains create a real cultural and social barrier between the different Welsh valleys. There has been no opportunity to explore Wales, or Manchester for that matter. I have heard more about the electoral districts and history of Scotland than I have ever done in my life. Of course, I am very tempted to talk about the beautiful town of Stamford and say what a tragedy and monstrosity it would be if it were divided up and part of it were taken away and put into Leicestershire or somewhere else, but I will not go down that route despite the blandishments of my noble friend Lord Graham, a man whom the whole House holds in the very greatest regard. I simply say that we are doing that part of our job properly, well and thoroughly, and it is quite right that we are doing so.

The second task which the public as a whole would expect of us is to make some progress, or at least to attempt to make some progress, towards consensus, because the public always think that we should try to get consensus on constitutional matters. The public are right about that, and I think that most of us, in our heart of hearts, all feel that we should try to get consensus. There has not been much of an effort to get consensus for a long time, but such an effort has been made this afternoon, and that is very important. The Bill does not deal with wards at all, but the Minister has said that he will take that on board and come back to the Committee with something on wards. That is a very positive statement. I take it in good faith, as we all do, and I do not think that we need say anything more about wards this afternoon, and I shall not do so.

Views have been expressed on both sides of the House, including by the noble Lords, Lord Rennard and Lord Newton, that counties are important. We can all argue about how important they are in particular contexts, but it is clear that they are important. Paragraph 5 to Schedule 2 says simply that the Boundary Commission "may" take account of counties. However, that is just permissive; it implies that you can do so if you really want to. It does not accommodate the counties. We debated earlier the preceding group of amendments, some of which would have forced the Boundary Commission to take account of counties. My noble and learned friend proposes a very reasonable middle road in Amendment 71A: namely, that the Boundary Commission "should, where practicable" do so. In other words, there is flexibility but no insistence. If the Boundary Commission feels that other more important considerations ought to override the sanctity of county boundaries, so be it. That is real progress and a sensible way forward. I hope that it may be the basis of consensus on this important matter of counties.

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I think that there is also consensus on a third and very important point, which was made by the noble Lord, Lord Rennard, from the coalition Benches: namely, that you cannot achieve these things and give the Boundary Commission any flexibility in practice unless we look again at the 5 per cent limitation. Otherwise, anything that we tell the Boundary Commission will be completely negated by the 5 per cent rule. What you cannot and must not do-I do not think that any of us would want to do this-is to give the Boundary Commission a contradictory brief and put it in a situation whereby it cannot solve the problem that it is being set. That would be quite wrong. If there is to be flexibility to enable the Boundary Commission to take account of county boundaries or other local factors which it considers to be important, it is clearly necessary to look again at the 5 per cent rule. I think that consensus has emerged in the course of our proceedings on that very important matter.

Fourthly, and finally, I sense there is a growing feeling that something needs to be done about my next point, not necessarily by continuing with the present status quo but not necessarily, either, by having what is in the Bill, which is nothing at all. We need to ensure that we do not just say, "Leave this matter in this House and never again is there to be any open discussion of the principles of our electoral boundaries". That would be a very unnatural situation. Therefore, we need to preserve something like the public inquiry system. My noble friend Lady Hughes explained how that had made a big difference in Manchester in a recent case to which she drew our attention, and I know of other cases in which that has happened.

I think I mentioned that I, with some supporters, gave evidence to a Boundary Commission. We did not win our point but there was a general sense of satisfaction that we had been able to air it and that the arguments had been properly, duly, publicly and transparently weighed. We do not need the existing form of public inquiry. My noble friend Lord Rooker set out how he thinks that the whole process could be more rapidly conducted. I was very interested in his suggestion in that regard, which seems a promising avenue of discussion under the heading of future amendments on the Marshalled List. However, some sort of public and open appeals process is absolutely essential if we are not to put ourselves in a situation whereby the great and the good, if we can describe ourselves in that way-perhaps we are the great and the bad-take an irrevocable decision and then hand over to a bureaucracy the right for ever after to take decisions behind closed doors and subsequently announce to the grateful public what their electoral boundaries will be without it ever having to explain itself in public in any kind of open forum.

We have made considerable progress on those four principles this afternoon. The prospect may be emerging through the mist of a structure that could command the consensus that we all regard as very desirable for a Bill of this kind.

Baroness Farrington of Ribbleton: My Lords, does my noble friend, like me, remember successive Governments and successive political parties trying to undermine the sense of place of Rutland, and failing?

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Lord Davies of Stamford: The factual answer to that factual question is yes, of course I recall that. No one in my constituency over the age of about 40 will have forgotten that. Nevertheless, that issue was resolved happily for all concerned in the context of public inquiries and establishes a very good precedent for them as a way of maintaining, or when necessary restoring, public confidence in the system.

Lord Wallace of Tankerness: The amendment would restrict the Boundary Commission in drawing up new constituency boundaries by a series of provisions specifying that constituency boundaries may not cross certain local authority or European constituency boundaries. I noted that, when moving his amendment, the noble and learned Lord, Lord Falconer of Thoroton, reiterated that he and his colleagues recognised the need for greater equality but seek to put that restriction on to the Boundary Commission in its recommendations.

The Bill provides for the Boundary Commission to take into account local government boundaries, as well as local ties, although that has not been acknowledged in some contributions. As we have said on more than one occasion, that is subject to the principle of equality. We believe that the details of how it does that should be a matter for the Boundary Commission. Just to clarify, a government amendment to the definition of local government boundaries was made in the other place. I re-emphasise that it means that the Boundary Commissions may take unitary authority boundaries into account.

It has been made clear in several contributions, not least that of my noble friend Lord Newton of Braintree but also that of the noble Lord, Lord McAvoy, that even under the existing arrangements the Boundary Commission has not exactly achieved what in some people's view might be perfection. The noble Lord, Lord McAvoy, talked about Hamilton being split into two. Even before the current split, there was a previous split between Hamilton North and Bellshill and Hamilton South. An important point, which was made by my noble friend Lord Newton and alluded to by the noble Baroness, Lady Hughes of Stretford, is that local government is not the sole challenge that Members of Parliament have to deal with. There are health boards, primary healthcare trusts and police divisions. It would be a nightmare, if not an impossibility, to try to ensure that the Member of Parliament had to deal with only one each of police, health and local authorities.

As we mentioned in debates on previous groups, we have sought generally to follow the 1986 Act provisions on local authority boundaries. We want the Boundary Commissions to have flexibility to take account of specific circumstances, but we also recognise that there is some merit in placing discretionary consideration in the hands of the Boundary Commission, including with regard to wards, about which I will say more in a moment.

In its fifth general report, the Boundary Commission for England noted that,

"some wards on the outskirts of towns contained very different communities. For instance, there were occasions where the majority of the electorate of the ward were urban dwellers residing in a very small area of the ward on the edge of a town. However, the small remainder of the ward's electorate was made up of those living in rural communities some distance from the town".

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That is why we believe there is a reasonable case in certain circumstances for the Boundary Commission to have discretion to split them and why there should not be a prohibition, which would be the effect of at least four of the provisions of the composite amendment moved by the noble and learned Lord.

I repeat that we seek-and this is enshrined in the Bill-to ensure one value for one vote, not to draw up constituencies to suit the administrative convenience of Members of Parliament. I cannot accept that, as the noble Lord, Lord Howarth of Newport, proposed, it is somehow impossible for a Member of Parliament to discharge his or her functions if his or her constituency includes more than one local authority. My noble friend Lord Newton of Braintree made that abundantly clear.

Lord Howarth of Newport: I am not saying that. I am certain that the noble Lord, Lord Newton of Braintree, represented his constituents entirely admirably. I am objecting to the thrust of reform that makes it far more likely that local authorities will be fragmented and that constituencies will consist of more, rather than fewer, local authorities, which must be calculated to make it harder for all concerned-Members of Parliament, other elected members and constituents.

Lord Wallace of Tankerness: I listened to the noble Lord's speech, and he gave the very clear impression that that was challenging in the extreme. As my noble friend said, there were three local authorities in the constituency that he represented. The constituency that I represented contained two local authorities. On the basis of the figures that I gave in a previous debate, by my calculation 187 Members of Parliament represent constituencies that have more than one metropolitan or non-metropolitan district boundary. I believe that it is more than possible to do an adequate job of representing one's constituents where there is more than one local authority in a constituency.

We do not believe that we should be tying the hands of the Boundary Commission in a way that prevents it from recommending the best solutions for electors simply for the convenience of Members of the other place. I take the point made by the noble Lord, Lord Foulkes, and the noble Baronesses, Lady Hughes and Lady Farrington, about the importance of local constituency parties. They of course have an important role in oiling the wheels of our democracy, but I do not think that their interests should be elevated above those of individual constituents.

I do not want to follow down the path of anecdotage, but the noble Lord, Lord Foulkes, mentioned the number of party fundraising events at this time in Scotland that are focused on Burns suppers. I had the great pleasure of attending a Liberal Democrat Burns supper in South Edinburgh, which has already reorganised itself to take account of the changes in the boundaries and the disjunction between Scottish parliamentary boundaries and Westminster boundaries. I do not really want to hear more of the Burns supper adventures of the noble Lord, Lord Foulkes.

Lord Foulkes of Cumnock: I just wondered whether it was in the Edinburgh South UK parliamentary constituency or the Edinburgh Southern Scottish parliamentary constituency.

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Lord Wallace of Tankerness: The point I was making was that it now calls itself South Edinburgh to take in the various parliamentary constituencies in the south of Edinburgh.

Lord Campbell-Savours: Will the noble and learned Lord give way?

Lord Wallace of Tankerness: I have tried to be patient.

Four out of the seven provisions in the amendment relate to wards and how they should be used in the Bill. I cannot accept that the Government have been dismissive-the word used by the noble and learned Lord-of wards. I certainly endorse what the noble Lord, Lord Graham of Edmonton, said, about the importance of the ward level. That is why, in response to the previous set of amendments, I stated our belief that wards are in many cases already the building blocks of constituencies. They are the level that can often reflect local community ties. The English Boundary Commission has confirmed that in the majority of cases in England, wards are used as the basic element of each constituency. For reasons that I have already given-that some wards might combine a large part of an urban area on the outskirts of the city and a rural hinterland-there might be reasons to give the Boundary Commission discretion to split boundaries. Therefore, an absolute prohibition, as proposed in the amendment, goes too far. I hope that the undertaking that I gave in response to the previous debate to look seriously at the issue of wards and to bring back our proposals on Report will satisfy the House at this stage. On that basis, I invite the noble and learned Lord to withdraw his amendment.

Lord Falconer of Thoroton: I am grateful to the noble and learned Lord for the detail into which he went. I will very briefly deal with his points. First, he rightly says that the Bill states "may take into account", rather than the commission being bound not to cross ward, unitary authority or other boundaries. If the noble and learned Lord cares-not now-to read my amendment, he will see that in some cases it is an absolute prohibition, for example in relation to European Parliamentary boundaries, district or borough wards. In others, it is not; it is a provision to "take into account". I have sought to reflect the point that the noble and learned Lord makes.

Secondly, I think the Minister said that 187 constituencies cross both metropolitan and other local authority boundaries. He does not need to intervene on this; his point is broadly that 187 currently cross different sorts of local authority boundaries. I completely accept what the noble Lord, Lord Newton of Braintree, who has much influence in the House, said. I am sure that he completely and excellently represented his constituency. The point that is being made on the other side is that it is better if that is not the position. One assumes that if it is 187 now, it is bound to go up under the changes to be introduced under the Bill.

The noble and learned Lord's third point was that he accepts as a matter of principle that the ward will be the building block. That was expressed explicitly by Nick Clegg when he appeared before the House of

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Lords Constitution Committee and when he spoke in answer to questions in the Commons. Why not put that into the Bill? My fourth and final point is to say how sad I was not to be in Edinburgh South-that is, Morningside, where I was born and brought up-to attend the noble and learned Lord's Burns Night supper.

I am grateful that he said at the end that he will come back with some ideas. I am not taking that as him giving me any kind of assurances, but I shall wait to see what happens next before deciding what to do about this sort of amendment. In those circumstances, I beg leave to withdraw my amendment.

Amendment 71A withdrawn.

House resumed. Committee to begin again not before 8.21 pm.

Housing Benefit (Amendment) Regulations 2010

Housing Benefit (Amendment) Regulations 2010

Motion to Annul

7.21 pm

Moved By Lord Knight of Weymouth

That an humble Address be presented to Her Majesty praying that the regulations, laid before the House on 30 November, be annulled.

Relevant Document: 15th Report from the Merits Committee.

Lord Knight of Weymouth: My Lords, the two Motions standing in my name on the Order Paper relate to two instruments to change housing benefit regulations. The instruments seek to cut the housing benefit bill by around £1 billion per year by 2015 by cutting what can be awarded under the local housing allowance arrangements from April through: first, the removal of the five-bedroom local housing allowance rate so that the maximum level is for four-bedroom properties; secondly, the introduction of absolute caps so that local housing allowance weekly rates cannot exceed £250 for a one-bedroom property, £290 for a two-bedroom property, £340 for a three-bedroom property and £400 for a four-bedroom property; and, thirdly, the removal of the £15 weekly housing benefit excess that some customers can receive under the local housing allowance arrangements. Fourthly, there is an additional measure, which we welcome, relating to an extra bedroom for those with care needs. However, the final-and, I argue, most damaging-measure on which I shall focus is the setting of local housing allowance rates at the 30th percentile of rents in each broad rental market area rather than at the median. The Government are increasing discretionary housing payment funding to local authorities by £130 million over four years to enable councils to try to mitigate some of the effects of these measures.

These instruments amount to little more than an attack on the poorer people of this country-those who have no choice but to rent and who are either low earners or on out-of-work benefits. Since the

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publication of the Government's impact assessment last summer, many organisations with expertise in housing, homelessness and poverty, such as Shelter, Crisis and the Residential Landlords Association, have raised serious concerns, shared by the Opposition, about these amendments to the housing benefit regulations.

The Government's changes to housing benefit were expertly summarised by the noble Lord, Lord Best, in his speech to this House on 2 December last year, when he said that,

"the intention is to reduce the housing benefit bill by some £2.25 billion per annum by the end of this Parliament. That is £2.25 billion a year that will not be paid through housing benefit to landlords. There are only two parties from whom this money can come; one is the landlord by accepting a lower rent, and the other is the tenants finding the balance from their own resources, including other benefits-since most are on benefits of different sorts, or pensions. Which of these two parties is most likely to take this very substantial £2-and-a-bit billion hit?".-[Official Report, 2/12/10; col. 1656.]

That is a good question, and half of that sum is to be found from the changes that we are debating today. The answer to the noble Lord's question comes in part from the Residential Landlords Association, the representative body of more than 9,200 private landlords. Its briefing on these regulations is clear. Its landlords panel survey found that 71 per cent of respondents would not lower rents. In fact, in light of the proposed changes, 46 per cent of landlords surveyed indicated that they would look to re-let properties away from local housing allowance tenants, reducing the level of private rental stock available to claimants and potentially forcing households into homelessness. Not only have the Government offered no evidence to support their assertion that rents will be lowered to meet lower housing benefit levels, but they cannot counter the evidence that points the other way. It is clear that the bulk of the savings from these measures will come from the pockets of the tenants.

The measures have serious implications for hundreds of thousands of honest, hard-working and vulnerable people. We should bear in mind the fact that 4.7 million people receive housing benefit in this country. Of those, 2 million are pensioners on pension credit guarantee, 500,000 are people on jobseeker's allowance and 700,000 are people in work in low-paying jobs. The Government's own impact assessment of the regulations as a whole predicted that almost 1 million families would be affected, with an average weekly income loss of £12 nationally, rising to £22 in London.

The intention of course, as Homeless Link points out, is to make life in receipt of benefit "uncomfortable", as a way of driving the jobless back into work. The popular rhetoric from the Government has been around the assertion that those claiming housing benefit are accessing accommodation that their working neighbours cannot. However, researchers at the University of Birmingham have found that this claim is out of step with reality. Housing benefit claimants receive a rent set at median market rates and so cannot live just anywhere. Furthermore, their findings suggest that, despite infrequent, extreme anomalies, 40 per cent of lower-income working families pay more in rent than they would receive in housing benefit.

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In truth, the Government's posturing over extravagant benefits sends a clear message: that the rationale behind these ill conceived reforms is founded on the excesses of a relative few. Their application would be tantamount to collective punishment-penalising the many vulnerable people for the excesses of the very few. From data compiled by the Cambridge Centre for Housing and Planning Research at the University of Cambridge, it is estimated that these cuts will force many more claimants into severe poverty, with the weekly income of 84,000 households dropping below £100 per couple after housing costs. Incidentally, these households are home to more than 54,000 children.

On the local housing allowance cuts as a whole, the Social Security Advisory Committee, in its withering verdict on these regulations, stated that,

"these measures must impact disproportionately on those low-income households with the least financial resilience and the fewest options for managing their lives and their finances".

Critics unanimously agree that the change to a 30th percentile in LHA calculations, along with the caps on housing benefit, will result in a significant drop in income for hundreds of thousands of households. Of these, an estimated 269,000 will fall into what Shelter calls "serious difficulty". Unable to negotiate a reduction in rent, they will have just three options: hoping their landlord will forgo a proportion of the rent; moving into cheaper and probably overcrowded accommodation; or becoming homeless.

The removal of the five-bedroom rate will act as a disincentive for families to come together. Why would two single-parent families with, say, three children each come together when they would be better off apart? Many tenants will run up arrears, making them "at fault" for their eviction and perhaps not entitled to emergency accommodation. It is expected that half of those households in serious difficulty will have to move or become homeless. Some 72,000 of that number are families, equating to 129,000 children potentially made homeless.

These changes will affect households in rural as well as urban areas and particularly those with high rents, such as Oxford, Edinburgh and Brighton, but they will be felt most acutely in London. Here, house prices are more than double the average for England and Wales, and private rents carry a 50 per cent premium, leaving only the worst-maintained and overcrowded accommodation available to housing benefit claimants under these proposals. The same research from the University of Cambridge estimates that, within five years, almost the whole of inner London will be unaffordable to those in receipt of benefits. Poorer residents will move to more affordable housing at the periphery of the city. With demand for private rental stock so high here, there is little incentive for landlords to reduce the cost of renting, so LHA claimants currently living in boroughs such as Hammersmith and Fulham, Westminster, Islington or Camden, where it is expected that no affordable stock will exist, will be forced into moving or into homelessness.

7.30 pm

London borough authorities expect that, with the caps in place, 82,000 families will face losing their homes in London. The Mayor of London described it

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as a "Kosovo-style ethnic cleansing". The poor will be pushed out of the capital; people in work will be pushed further away from their place of employment, their place of worship or the support networks of friends and family on which they rely. Children will suffer the upheaval of changing schools. It is all in the impact assessment. Information from London Councils shows that families will be moving into boroughs where there is already a shortage of early years school places. The children may not have anywhere to go to school.

Further still, individuals requiring specific educational facilities, care or assistance may not be able to access the types of service available to them in the borough in which they currently live. Those families will be moving into local authorities in such numbers that the existing public services there may well be unable to cope. I gather that boroughs such as Haringey and Newham are already looking at how to recruit more social workers to help them to cope. The Social Security Advisory Committee remarked:

"Enforced relocation to cheaper areas entails not simply upheaval, cost and stress to the households involved, but also the transfer of public service obligations and costs which the receiving areas are likely to be ill-equipped, unprepared and unresourced to handle".

It has been estimated by Shelter that some 35,000 households will approach their local authorities for advice and assistance on homelessness. Many of these will be families with dependent children and as such considered to be "priority need", to whom the local authority has a statutory duty to provide housing. Crisis believes that the likely result will be that single homeless people, who are already not a priority for housing, will become even less of a priority for assistance.

The estimated costs attendant on these housing dilemmas is not insignificant. It is estimated that £120 million will be required to satisfy temporary accommodation needs. Going even further, Homeless Link has identified the regulations' tipping point-the figure at which costs begin to outstrip any benefits or savings derived-as £1.77 billion, equivalent to 106,070 homeless people. That number represents just 28 per cent of the estimated households at severe risk of homelessness as a result of the proposed changes. The most pessimistic forecasts suggest that these amendments could cost the state in excess of £6 billion. These regulations are in danger of increasing the deficit, not reducing it. Far from supporting people into work, breaking the cycle of dependency or ending the benefits culture, the principal effect of these amendments looks to be the ghettoisation of the capital's disadvantaged-forcing families from their homes, forcing children into poverty and homelessness and overburdening already stretched public services, all at a potential cost of three times the estimated savings.

Your Lordships will be relieved to hear that I do not think that the Government should do nothing about the rising cost of housing benefit. The Minister will undoubtedly claim that these are unfortunate changes forced on him by the economic legacy left by the Government of which I was a member. I absolutely reject the notion that there is no alternative. There is an alternative economic policy, which starts with stimulating growth and then has prudent cuts following

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behind. I will not rehearse that argument now, but suffice it to say that he could do things differently with these measures.

The Government have got it half right. Within the package, the largest block of saving is made by abolishing the £15 excess. They should do that and go ahead with the payment for an extra room for carers. That package would save half a billion pounds per annum. However, they should suspend the other measures. The removal of the fifth bedroom saves them £15 million a year at most and carries the risk of costing much more than that in the cost of homelessness. Capping the rates generally should be dealt with through the wider cap that they are proposing on benefit income, which would retain much greater flexibility to deal with individual needs.

The move to reduce affordability from half of houses to rent to 30 per cent needs more debate, as it raises huge concerns, especially combined with the move to constrain local housing allowance increases to the CPI measure of inflation, which is proposed elsewhere. I therefore suggest that these should be tackled in the context of the forthcoming welfare reform Bill, which would allow time to address the large risk of homelessness from these measures with the associated social and financial costs that go with them. That would allow all Members of this House to amend and properly debate these measures.

I have sought to be constructive and there is one other thing that I will do to be constructive and helpful to the House tonight. I am clear that it is in order to move the Motions in my name, given that the Cunningham report of 2006 said:

"It is consistent both with the Lords' role in Parliament as a revising chamber, and with Parliament's role in relation to delegated legislation, for the Lords to threaten to defeat an SI"-

for example, in the exceptional circumstance of the Merits Committee drawing it to the special attention of the House. That is what has happened in this case, with the 15th report of the Merits Committee in December last year. However, I am mindful that there is an alternative Motion in the name of the noble Lord, Lord Best. That would not stop these damaging regulations but would send a very strong message to the Government from your Lordships' House. The Government should listen and act if the House supports the Motion in the name of the noble Lord, Lord Best, as I hope it will. Therefore, in keeping with the constructive nature of this Opposition, our respect for convention and our desire to be helpful to the House, I intend to withdraw my Motion at the end of the debate. In the mean time, I beg to move.

Lord Best: My Lords, I shall speak to all three of these Motions, but in particular, to the third one standing in my name. I share the concerns of the noble Lord, Lord Knight of Weymouth, that the changes introduced by the regulations and the order are likely to have very serious consequences. The Government expect the cumulative effect of the eight caps, reductions and restrictions on housing benefit and local housing allowances, of which two are the subject of regulations before us today, to achieve savings of over £2 billion each year by 2015. What is not certain is where the impact of these changes will fall, as the noble Lord, Lord Knight, indicated.

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The charities working in this field have produced excellent briefings for us. Those have come from Shelter, Crisis, Citizens Advice, Homeless Link, Barnardos, Family Action, along with the Chartered Institute of Housing and the National Housing Federation, with support from the Local Government Association and some impressive work once again from the Greater London Authority. These bodies all note the likelihood of several thousand tenants facing homelessness. Apart from this wrecking the life chances of the families concerned, the charities point out that the extra costs of homelessness could more than outweigh the housing benefit savings. Homeless Link notes that, on conservative estimates, if even one quarter of those identified as at severe risk were to become homeless, then all the gains from the housing benefit cuts would be lost.

The charities also point out, as has the noble Lord, Lord Knight, that a greater number-over 900,000-of tenants who stay put when their benefits are cut could be forced to find the balance from their very low incomes: state pensions; incapacity benefits; jobseeker's allowance; or, for a fifth or so of these tenants who are in low-paid work, from their very modest earnings. I do not believe it is the intention of Ministers to increase the number of homeless households, which would, in any case, be self-defeating and counterproductive, nor do I believe that the Government intend to impoverish nearly 1 million very poor households with the equivalent of a cut in their pensions and other benefits of an average of £12 a week for each household. If that was the outcome, set against the coalition Government's commitment that the effects of reducing the deficit should not fall disproportionately on those least able to take the strain, then the housing benefit changes would have to be deemed a terrible failure.

Rather, it is hoped that, away from the very high-value areas that claimants will have to leave, landlords will reduce rents to accommodate all or most of the fall in housing benefit/LHA payments. If so, to a large extent it will be landlords not tenants who take the hit. This would certainly be a desirable outcome where landlords are abusing the HB arrangements. The analysis by the Department for Work and Pensions suggests that 13 per cent of the rise in housing benefit is attributable to greedy landlords increasing rents to squeeze more out of the system. Thirteen per cent is not a huge proportion of the rise in costs, but nevertheless, it is worth addressing.

I think the new measures will indeed lead to some landlords reducing their rents. In some parts of the UK, particularly where unemployment has been very high and may go higher, a very high proportion of tenants are in receipt of housing benefit. If landlords are not to risk serious arrears, they will have to adjust to lower rents. In some places, current market conditions mean that the alternative of selling the rented property into owner-occupation will not be an option. Landlords may be resentful, they may even lose money-I fear they will not be investing and improving their properties-but, like it or not, they will have to go with the lower rents if that is all the tenants can pay.

Just how widespread will this be? In how many cases will it be the landlord not the tenant who absorbs the cost of the cuts? Talking to private landlords from

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different areas, I think there are opportunities for rent reductions where the local housing allowance is paid direct to landlords-as is facilitated by these regulations, avoiding the danger of arrears, which can lead to evictions that are costly for landlords as well as traumatic for tenants-and where the required reduction is relatively small, say 5 per cent of the rent. In such cases, good will toward good tenants, combined with the hassle and costs of replacing tenants, will incline many landlords to make modest rental concessions, particularly in not raising rents as soon as the opportunity arises, but there are definitely finite limits on the extent of this restraint. Even a 5 per cent rent reduction will be a problem for a lot of landlords. Five per cent of rent might exceed the margin, the profit from letting, after taking account of mortgage repayments, management and maintenance costs, an allowance for vacancies and so on. Some buy-to-let landlords with relatively high debts on their property could be in difficulty if they were to cuts rents by 5 per cent. Moreover, the figures in the DWP's impact assessment indicate that a 5 per cent rent reduction would not be enough to close the gap, to remove the new shortfall between benefit and rent, in the great majority of cases. It would appear to cover less than 90,000 cases out of a total of well over 900,000.

There is another reason to fear that landlords will not implement the hoped-for rent reductions. Since demand outstrips supply in so many areas, landlords can simply opt to reject those on benefit. Already a high proportion of landlords and their agents will not accept those on HB. These tenants cannot put down a deposit or pay rent in advance. Local authorities, unhappily, often take some time to process HB applications and early arrears can mount. Rent is paid on a four-weekly basis while landlords expect it on a calendar monthly basis and, however unfounded, there are fears by landlords and their agents that those on HB will be troublesome tenants. The compensation has been that LHA can pay up to the level of the middle rent for the area, the 50 per cent marker, but now that the maximum is to be reset at 30 per cent, this advantage is lost. Where they can, it seems likely that more landlords and managing/letting agents will avoid letting to those in receipt of HB. I am told by the staff in local authorities who seek to secure privately rented accommodation for vulnerable households in their area that previously helpful landlords are already pulling back, even where the council guarantees the rent and gives back-up support for tenants.

The underlying problem is, of course, the overall acute shortages of available homes. With more demand than supply, experts, such as Professor Michael Ball at Reading University, predict rent rises, not rent reductions. Until mortgages are plentiful again without requirements for large deposits, the private rented sector will have a ready market of young people who cannot buy. If landlords stop letting to those on benefit, properties will be available to absorb some of this growing demand, but that would, in the absence of sufficient housing, exacerbate the problems for those reliant on benefit.

It is very far from certain that many landlords will reduce rents, and it is possible that more landlords will withdraw from letting to those in receipt of these lower benefits. Since we now rely on the private rented

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sector to house nearly a million poorer households, this would be very bad news, but, as the Merits Committee notes, the DWP's impact assessments states that,

"it is impossible to quantify the indirect impact of the measures with any degree of certainty as it is not possible to predict the behavioural effects on tenants or landlords."

It is for this reason that I have brought forward the resolution in my name that is before your Lordships today.

The resolution proposes a wholly independent, rigorous review reporting to both Houses of Parliament on the impact of the HB changes: on children; on homelessness; on whether mitigating measures, including the modest sums available in discretionary housing payments, are making a difference; on whether local authorities are being put under intolerable pressure, not least in handling the extra social and welfare costs if there is an influx of low-income households into their area; and so on. Thankfully, existing tenants are being given an extra nine months before facing these HB changes, with none affected before December 2012, so a first review one year from now can cover only new lettings, not the existing stock. The feared mass migration out of central London will not have begun in earnest before 2013 but I suspect it will become apparent quite early if landlords are not reletting vacant properties to those on the new benefit levels, in which case the review would enable Government to take corrective action. We know from the concessions made in response to the highly critical Social Security Advisory Committee's report that swift action can be taken if required.

Last week I met the Minister and I believe he shares some of my concerns. I am hopeful he will be willing to make a significant statement today in response to the proposition in my resolution. An independent report next year could provide the basis for the Government to make "in-flight" corrections to amend or suspend some of these regulations and to prevent the dramatic changes to the HB system, leading to a potential national tragedy for so many low-income households.

Lord German: My Lords, I thank the noble Lord, Lord Knight, for his agreement that he is not going to pursue the annulment and also for his support of the noble Lord, Lord Best. The Motion will meet the problem we are all facing-what might happen in the future. In some ways, it is like trying to judge between those who know the next winner of the Grand National and those who believe that it is an art form to study the form and decide which direction to take. Essentially, this whole issue rises or falls on an assessment of how the market will behave.

I want to consider the agreement between the former Labour Government and what the Government are trying to do today. The noble Lord, Lord Knight, said that we should go ahead with the £15 that was made available to people who could negotiate a smaller rent and we should take that away. That was a proposal that he quite rightly made while in government. There is a general agreement that the costs of local housing allowance and housing benefit must be reduced and contained. There is a question which we are all struggling with about the speed with which we do it. There probably will be a consensus in the overall ambition but a difference in the speed by which we achieve that.

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There is an agreement that the current expenditure trends, as shown in the impact assessment by the DWP, are unacceptable and unsustainable. Continuing as we are from the evidence that we are given, private sector rents will be driven up, the gap between housing benefit paid in social housing and in the private housing sectors will be extended, and the difference between average earnings and private sector subsidised rents will be widened. That is unacceptable. We know from the figures that the average impact of these measures on households in the private sector will be £12 a week, but of course there are great disparities in that. The figure is £12 a week across the whole of Great Britain but if you look at the difference between Blackpool and London, you get a huge variation. That was a figure which the previous Labour Government alighted on as one of the reductions they would make, but for a much smaller group of people than that which is proposed now. So it sounds remarkably like we are moving in a direction in which people want to travel but not necessarily at the speed at which everybody wants to go.

There has been the critical Social Security Advisory Committee report and its priority is the impact of the regulations. That is its job, not dealing with deficit reduction. Nevertheless, the report quite rightly said, "Do not implement this, but if you are choosing to implement it, here is a range of things you should do to make these changes work". I am pleased that the Government have accepted the majority of these, in particular the delaying and phasing for current recipients of housing benefit.

There is a quite distinct issue relating to London in this variation. One in four of housing benefit households in London is affected by these measures and the primary impact in London is that the average figure across London for the change in rent to be paid by these allowances is £22. However, 17,000 of the 21,000 losers as a result of a cap on the rent are located in London, so there is a London issue which is almost unique within Great Britain. I read in the other place the evidence given in the form of the committee report and the committee discussion and there was a sense that people were seeing the whole of Great Britain through the prism of London. That is a dangerous process and we may have to look at London separately because in the rest of Great Britain the average impact of these changes on rents is £9.84 a week. In a period when landlords have low interest rates on mortgages, this may be the right time for them to absorb this change.

I will return to the London problem later. First, I would like to look more closely at the impact this figure of £9.84 will have on household rentals around the rest of Great Britain. Essentially, the difference of view which I hear on this issue is around this central question. The noble Lord, Lord Best, said it just now. Will landlords reduce their rents to meet the new levels set by Government? This is fundamentally an issue about the operation of the private rented sector market.

The Government essentially influence about 40 per cent of rents in Great Britain. In terms of pure economics, the state must surely have a prime influence on the level of general rents because it pays the rents of

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40 per cent of the properties. It is not quite a monopolistic situation, but the Government are a major purchaser of tenancies in the country.

How has this market operated until now? On the one hand, it seems that tenants have found properties for rents at levels which they know the Government will pay; on the other hand, landlords have set their rents at the level which the Government will pay. There is no incentive on either side to adjust or to deal with this matter. In straightforward terms, it is a market in which the principal and largest purchaser has not really had much influence over the price paid.

Will the changes make a difference? I sincerely hope so, but we are talking of market behaviour. It cannot be an exact science. That is why it is essential that the spirit of the Motion of the noble Lord, Lord Best, is followed and a full evaluation and measurement of the impact are carried out just as soon as the first complete annual cycle of the new regime has ended. We need to know whether the desired changes which it is assumed will be brought about as a result of the measures have taken place.

The market is more likely to work in the direction that the Government want if the state enters the market as a negotiator. Currently, there is no incentive for the state to get the best rental price. We are talking about an incentive that is, first, a copper-bottomed guarantee of rental income, which the Government can provide-the Government are backing the money being provided-and, secondly, a direct payment to the landlord if they accommodate the changes. That is an important concession which the Government have made as a result of the report by the Social Security Advisory Committee.

I welcome the additional funding for housing benefit specialists to intervene in negotiations with landlords, but I have to ask the Minister two questions. First, do those people have the right skills to enter a negotiation market where previously they dealt with a different set of criteria and a different environment? Secondly, is the funding which they are making available to enable the negotiation to take place sufficient?

The big question for London is: is there a ready supply of non-housing benefit tenants ready to fill the properties if landlords are not prepared to reduce their rents? That is why I suppose that such a huge portion of the new funding for discretionary housing benefit and assistance is going to London. Will the Minister confirm that the Government will ensure that the most vulnerable are protected and recognise the distinct market pressures which make London so different?

I accept, of course, that there is mobility of tenancies in London. As a relatively new Member here who has had to seek to rent a property in London during the week, I have found that tenancies move very quickly-you will not expect to take a long time looking over a property as you might normally do in other parts of the country. A quarter of a million moves take place each year in inner London alone, which demonstrates to me that people seem to want to move rapidly. Having moved several times in my life, I must say that it has been the most horrendous part of

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my life that I can remember; I would prefer not to move at all because it is such an unpleasant exercise. I suppose that there is a different quality to life in London which means that people like to move around more rapidly.

However we judge this matter, we have to recognise that the reason for pressure on the funding of private sector rents is a shortage of social housing in this country. I hope that the Government's ambitions for the net number of new properties in the social sector will be achieved, but much more can be done in this field by way of other arrangements with private funding. Much more imaginative use of private funding can be made to create more units of social sector housing. We need to dwell on that matter because this is an equation. If we want to make sure that the balance of the equation is right, we need more social housing in our country. We must remember above all else that people need and deserve a proper roof over their heads. In all the initiatives that we take to keep public expenditure under control, we must not lose sight of this fundamental aspect of a decent society.

The Lord Bishop of Hereford: My Lords, I recognise with others who have spoken a need to reform the present arrangements for housing benefit but I also express my concern about the measures that are before us. The noble Lords, Lord Best and Lord Knight, presented some alarming figures which, even if we perhaps dismiss the more extreme end, nevertheless give rise to considerable grounds for concern.

The noble Lord, Lord Best, referred to a number of charities that have supplied him with briefing papers; I have been involved with a number of others. Housing Justice expresses fear that the arrangements being proposed would significantly increase the number of homeless people, particularly within London but elsewhere in the country as well.

A reduction in housing benefit at a time when we are facing all the uncertainty and the outworking of the comprehensive spending review compounds the complications of the system and risks therefore greater harm being done to those who are most vulnerable. It is so difficult, as I think everyone who has spoken already acknowledges, for us to assess the outcomes of the proposals both for those on housing benefit and for others in the system.

8 pm

The noble Lord, Lord German, focused very much on the financial aspects of the market and what would happen to rents, and the effects therefore on the families who might have to bear the extra costs of the £22 here in London or the £9.84 elsewhere in the country. I have two comments to make about that. First, £9.84 may not sound a lot of money. Certainly, some on housing benefit are in employment, and perhaps some of them could stretch to that amount-but "stretch" would be the operative word. Many others are not in employment, and the amount of disposable income after they have met their outgoings and the demands on them is very limited. They are stretched already. We need to be sure that we have some imagination as to the impact-if I can put it to noble Lords like this-even of £9.84 a

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week, and how disastrous it could be for some households. It could be met only by them eating less or having less on their fuel bill, or doing without some other major thing that they need in their lives.

My second point is that money of course drives this, but the focus must not be just on the money. We must also understand and try to see through the consequences of these changes, which might be driven by finances but will have a huge impact on families, relationships and social groupings. As the noble Lord, Lord Knight, said, one consequence of the proposals would probably be that a lot of families would have to move from their existing houses to other areas. If they did so with young families and small children at a point when they needed stability in their lives, that could be very damaging-and not only to them; it could have longer-term consequences. It could be damaging, too, in that they may no longer be able to work where they were working before.

This could have a double effect by creating more monochrome areas of our society. The areas that they leave might become more monochrome, with more expensive homes and more rental homes for those who can afford them and who move in. Similarly, the areas to which they go might become more monochrome. The big society at its best is also a very healthy society, which also means a mixed society. If the consequences of the movements that might come about because of this are that different groupings become more monochrome, that is retrograde and potentially harmful and damaging to the societies and communities in our land.

I was grateful that the noble Lord, Lord German, referred to the provision of social housing. I wanted to stress that as well, because part of the problem with high rental is demand. If we are to address one piece of the picture, as we need to do to find a different way in which to organise and provide housing benefit, we must look at the totality of the picture. That is why I support the remarks of the noble Lord, Lord Best. Part of the totality must be the provision of more housing and a greater emphasis on the supply of that housing.

In conclusion, I recognise the wisdom of the proposal and am grateful for it, and I hope that it will find favour because it will help us to address complex issues. We must let our judgment be driven not just by the finances but by the family and social needs, and we must emphasise the need for an increase in the supply of housing.

Baroness Sherlock: I shall pick up precisely where the right reverend Prelate the Bishop of Hereford left off in looking at the impact on children and communities. In preparing for this debate, in common with other noble Lords I read briefings from a wide range of charities and was very grateful for them. I also read the excellent report from the Social Security Advisory Committee, but probably the single most informative document that I have read so far has been the impact assessment from the DWP. I even thought of simply reading out sections of it in place of a speech, until it occurred to me that noble Lords might have read it already, but it is probably the most damning impact assessment that I have ever read.

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Rather than repeating the comments that other noble Lords have made far more eloquently-my noble friend Lord Knight did a beautiful job of setting out the detail on this-I want only to look at what that might mean for a family, because it is very easy for us to consider the policies without understanding the impact on individual families.

I spent some time running a charity that worked with single parents. A lot of the single parents who came through the door would phone up when their world had suddenly fallen apart. Perhaps the husband had left, or something had happened and the marriage or family had broken up. Often, a pattern would follow from that. Usually, the mother would end up with the children. She would often have been working, as would the father. When she had to do the childcare alone she would find that she could not manage it and do the same job, because that simply did not work, so she would often then give up the job. The pattern would be that she would often move to be closer to her own family-perhaps her own mother or father-who would help to share the childcare. Over time, she would rebuild her life and often end up getting a part-time job with childcare and being helped by the family and friends in the neighbourhood. She was usually able to do that only because of tax credits and housing benefit. Suddenly, the family would begin to be back together again.

Imagine what happens to that lone parent in that situation if she suddenly finds that the rent on the family home which she has managed to establish can no longer be met by the local housing allowance. What does she do? The landlord might be kind enough to drop her rent, but what if he does not? She then has two choices. Should she try to stay put and make up the difference, when we already know from Crisis that 48 per cent of people on the local housing allowance already face a shortfall? She might already be trying to top up the rent as it is. Even if the difference is only the £12 a week which the noble Lord, Lord German, mentioned, that is a lot of money to someone on that kind of income. If you shop around, £12 a week can buy a pair of children's shoes or put a lot of food on the children's table. At that level, £12 a week might simply be beyond her reach; it might as well be £1,200.

What does that lone parent do? Does she decide to move to a different area? In doing so, if she moves from inner to outer London, for example, the children will certainly have to change schools, if they can find a place. In doing that, their schooling is disrupted and they lose contact with their friends. In many cases, the woman loses contact with her family. She might then not be able to travel back to the job. The travel costs might be too great or her own mother cannot mind the children, which means that she cannot risk being late back as she has to be there in time to pick the children up from school. We can end up in a situation where the children's lives have been disrupted, the mother might be forced back on to income support, the family has been fractured and the children will suffer. The consequences are potentially significant.

I do not want to wave a shroud; that is not my intention. I want to try to dismantle a policy from its larger scale to see what the impacts might be on an

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individual set of families. In fact, the impact assessment makes it very clear what the consequences are of some of that dislocation. It talks about the evidence of what happens to the educational attainment of children who are moved-about the impact on the GCSE points of those who are moved at key stages. It talks about the dangers of overcrowding, because the alternative for our lone parent is to stay put or perhaps to go to a smaller house, squeezing a family into a tiny flat. But then where do the children do their homework, as the impact assessment points out? What are the consequences for that family?

The other issue is the other wider impacts of a choice such as this. What happens to the families who have traditionally lived in a very mixed area, in the way that the right reverend Prelate described? I visit people who live in Islington-I went to a church there-and have always been hugely impressed that in so much of London there are such areas, where rich and poor live side by side. But where do they mix in practice? I remember the vicar of Islington walking me down a street to show me a beautiful Georgian terrace on one side and an interesting and challenging 1960s council block on the other. He said, "You know, the joy is that the people in the Georgian terrace look out on the council block and the people in the council block look out on the Georgian terrace". The real joy was in fact that their bins were emptied by the same council service, that they went to the same GPs and that they shopped in the same local neighbourhood stores when they needed to. In other words, they shared local services. One thing that has long been observed is that services for poor people become poor services, while one thing about having people in mixed areas is that you have what I think a government Minister memorably described as the sharp-elbowed middle classes, who are there to make sure that those shared services are available to all and are protected and developed.

The case that I have described might be just one family, but the impact assessment says that 450,000 of the households affected contain children. If 450,000 households with children are affected by these changes, I very much hope that the Minister will be able to consider the sensible suggestion from the noble Lord, Lord Best, and take his time to consider the impact of two things. First, what will the impact be on families with children? He should track what has happened to some of those families and look at how their lives have changed. Secondly, I strongly urge him to consider how this interacts with the many other measures that the Government have taken through.

That single parent will already be facing cuts from the Government in her childcare help and in the amount of money that she is allowed to earn on her tax credits. She could already be facing a range of other cuts and benefits. She is already in a context in which inflation is rising and the local housing allowance will be uprated only in line with the CPI, while VAT and fuel bills have just gone up. These families are much squeezed already. The very least we owe them is to make sure that we do not take a step such as this without properly understanding the implications.

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Lord Adebowale: My Lords, I support the very sensible proposals made by the noble Lord, Lord Knight. I spent a good chunk of my career working in housing, on estates and in homelessness, and I am very concerned about the impact of these changes on poverty and on the Government's attempts to reduce poverty and reduce the Government's deficit. The noble Baroness, Lady Sherlock, set out very clearly the impact on individual families, and we know that transition affects poor families disproportionately more than richer families. The right reverend Prelate the Bishop of Hereford made the very strong point that these proposals not only have a financial impact on poor families; they also have an impact on social services and neighbourhoods, crime, mental health and substance misuse. Throughout my career I have seen this impact walk through the doors with the homeless and with those at risk of homelessness.

While I understand that the proposals of the noble Lord, Lord Knight, stand no chance of going anywhere, they are actually worthy of careful consideration. We have not thought through the impact on families and on the societies in which they live-on social services, on health, on mental health and on employment. Given that the amendment of the noble Lord, Lord Knight, will not go through, the proposal of the noble Lord, Lord Best, is second best-no pun intended. Actually, it was intended. If you happen to be one of the families at risk-the majority of which, by the way, are in employment, low-wage employment though it is-it is not much comfort to be told, "Hang on a minute, you will suffer for a year and then someone might pop along and do some research into the impact". Frankly, it is one of those amendments that I am forced to support. In conversation with the noble Lord, Lord Freud, some time ago, I expressed my concern that the Government have no plan B. It is no good making these swingeing cuts on the poor, who do not have the broadest shoulders to carry the impact of the deficit, and not have a clear plan B.

8.15 pm

Even if we accept that we will not know, as the noble Lord, Lord German, pointed out, what the impact of these cuts will be on actual families-no-one can see into the future-we know that the poor will suffer. We know where they will suffer, we know how they will suffer and we know what the impact on public services will be, but we do not have a clear plan B. At best-that is another pun-the Government need to commit fully to the proposal by the noble Lord, Lord Best.

Many of the changes seem to be almost arbitrarily imposed. Why reduce local housing allowance to the 30th percentile, when in many areas the proportion of private sector properties rented by tenants receiving the LHA is well over 30 per cent? The average is estimated at 39 per cent. Why cut LHA payments by 10 per cent for people on jobseeker's allowance for over a year when those who are in social housing or are supported by other members of their household will be unaffected? All this has one key purpose, to save money, but little thought appears to have gone into the multiple transferred costs that could be incurred by evicting up to 185,000 households. The cost in legal

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aid alone is estimated to reach between £3 million and £5 million per year, while the demand for temporary accommodation is likely to cost between £61 million and £121 million. That is before we even consider the impact on schools and social services in the areas that will have to absorb tenants who are priced out of parts of the country, particularly London. I thank Alex Fenton of the Cambridge Centre for Housing and Planning Research for those figures. Homeless Link has calculated that if a mere quarter of those who are identified as being at severe risk of homelessness lose their home, all estimated savings to the state will be lost.

It is very easy to assign the cruelty to-and it is cruel if you are on the receiving end of these cuts and of the complexity that will be imposed on already stressed families and individuals-and to pray in aid, the Government's and the country's financial position. Frankly, it is not good enough, especially a week or so after we watched the chief executive of Barclays Bank in effect put two fingers up to the poor and to the rest of us. It is not acceptable. One group is being treated very differently from another. We need some equality of debate and of access to the good things in life, and I hope that the Government will at least support with enthusiasm the Motion of the noble Lord, Lord Best.

Baroness Thomas of Winchester: My Lords, it is no secret that when these regulations were first announced I had deep concerns about them, as I made clear in the housing debate that the noble Baroness, Lady Hollis, introduced at the beginning of last November. When the Social Security Advisory Committee's very critical report was published, the Government modified their original proposals in two important ways, as we have heard: in relation to the timing of the changes and in allowing direct payments to landlords in certain circumstances.

The nine months of breathing space for existing claimants is welcome to give them more time to find alternative accommodation if necessary, although it will be paid for by bringing forward the moving of LHA rates from the median to the 30th percentile for new claimants. Also delayed is the introduction of the cap on LHA payments and a reduction in the maximum number of bedrooms that a claimant is entitled to, from five to four. Overall, the change in the phasing means that some claimants will be hit by the cut a year earlier than they might have expected, while others will have a bit more time before the cuts bite.

Turning to the other concession, direct payments to landlords, I am glad that the Government have now agreed to widen the criteria that local authorities should consider in order for this to happen, although I find the wording of this concession quite convoluted-perhaps deliberately so, in order to give some flexibility-so perhaps the Minister can help me. The wording is:

"From April 2011, in cases assessed under the local housing allowance arrangements, local authorities will be able to pay housing benefit direct to the landlord where they consider that it would help the customer to secure a new tenancy or remain in their current home. It follows that the rent must be at a level that they can afford. We will work closely with local authorities to ensure that this provision is used in very specific circumstances where landlords are reducing rents to a level that is affordable for customers".-[Official Report, 14/12/10; col. WA 170.]

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I am glad that the Government are providing guidance to local authorities because to me these three sentences could mean three different things. I am not an expert in these matters, but they do not quite seem to hang together.

While I am talking about welcome news, we must not forget the two provisions in the original announcement of, first, an additional bedroom to be included in the size criteria used to assess HB claims in the private rented sector for an overnight carer of a disabled person or someone with a long-term health condition and, secondly, a large increase in the discretionary housing payments. Both those measures are very welcome.

The $64,000 question remains, however, as all the speakers so far have said: will these housing benefit regulations mean that landlords will reduce their rents, thus bringing the huge housing benefit bill down, to general rejoicing by taxpayers and the Government, or will it mean that not enough landlords will, or can afford to, reduce their rents low enough for LHA claimants, that the discretionary housing payments will be spread too thin to make much difference and that therefore thousands of people will face eviction, child poverty will increase and local authorities will eventually have to pick up a very large bill?

Many statistics have already been given and I will not add to them. We all know why the bill for housing benefit has ballooned-there is nowhere near enough social housing throughout the country and so councils have turned to the much more expensive private rented sector, with buy to let becoming a popular way for people with capital to cash in on the shortage of rental accommodation. While there may be a percentage of greedy landlords who are able to charge unjustifiably high rents-the noble Lord, Lord Best, referred to them and gave a figure-is not the real truth of why the HB bill is so high not that housing benefit has inflated rents but that there are huge numbers of low-paid and unemployed people who qualify for housing benefit?

It is clear that, as my noble friend Lord German has said, London with its high rents is in a category of its own, even though a lot of the boroughs are receiving the cushion of the bulk of the discretionary housing payments. To those of us who live and work in London, the mix of housing works to everyone's advantage, as the noble Baroness, Lady Sherlock, said in her powerful contribution. If a large number of the low-paid workforce who receive LHA are forced to move out even of Greater London, then everyone suffers, because life in central London depends on low-paid workers; we do in this House. Of course we all understand that low-paid or unemployed people on housing benefit with large families cannot expect to live for ever in high-end houses or flats in central London, although I am quite sure that very few actually do. However, we know that a lot of families will be forced to move in the next couple of years, as the noble Lord, Lord Adebowale, said. We just hope that this will not mean that they will be pushed out of the reach of good employment and transport, thus exacerbating the situation.

The real worry about these regulations is that dropping to the 30th percentile could have a devastating effect on these families all over the country, many of whom

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find life a struggle even now. This regulation is the one that could cause evictions, particularly in housing hot spots outside London, such as Brighton and Cambridge, with landlords not having to reduce their rents because they can always find someone not on housing benefit to pay the going rate.

What we need, and what I called for in our debate in November, is what the noble Lord, Lord Best, calls for in his Motion: an independent review of housing benefit in the private rented sector. I know that the Minister will say that this happens automatically in his department, but we need an independent review to be set up and to alert Parliament quickly if the worst fears of some of the relevant organisations in this field, which have already been mentioned, are being realised. Many groups are warning of the dire consequences of the effect of these regulations in today's difficult economic climate, particularly for single parents and disabled people. The noble Baroness, Lady Wilkins, may say more about disabled people shortly. What would reassure many of us who are concerned about these changes is to hear that the Government will take swift action to alleviate the situation if they are wrong and the organisations are right. I look forward to my noble friend's reply.

Baroness Hollis of Heigham: My Lords, I declare an interest as chair of Broadland Housing Association. I will not follow my noble friend Lady Sherlock, the right reverend Prelate and the noble Lord, Lord Adebowale, in talking about the human stress, distress and misery potentially in waiting for so many thousands of families with children in our country. Instead, I want to do something different; I want to challenge the very premises behind the Government's strategy, which I think are false.

We have been here before, with the Housing Finance Act 1972 and especially in the late 1980s when the Tory Government again pressed up rents on the grounds that they should subsidise people, not property. We on the Labour Benches pointed out then what would happen. The selfsame money that had been spent on new homes was now being spent on housing benefit, which in turn trapped people out of work and left us with a shortfall in housing. Now the Government are trying to rectify a problem of their own creation by capping HB. They believe, falsely, that HB is driving up private sector rents, that the HB bill has grown because of those increased rents and that, by capping HB, they will press down rents.

The second fallacy is that this policy is consistent with universal credit-a policy for which I applaud the noble Lord, Lord Freud-which seeks to bring more people into the labour market. On the contrary, I fear that these HB caps, together with the unpleasant and bizarre policies of Mr Pickles, will have the reverse effect. Let me unpick this a little. The Minister says that as 40 per cent of the tenants of private rented sector properties receive HB-a rather disputed figure-HB rates determine rents. However, he will be aware, I am sure, of two very simple statistics from his own department. First, as quoted by the noble Lord, Lord Best, the DWP's own figures show that the increase in housing benefit has been caused not by

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increased rents but by increased demand for HB from more tenants in both the private and public sectors. Only 13 per cent of the increase in HB can be attributed to private sector rent increases. In other words, the increase in the HB bill has not come about because HB has driven up rents and, therefore, has sought to catch up with the rents that it has inflated. Instead, the HB bill has risen because more and poorer people are claiming HB, including those in low-paid work. That is a fact.

The second statistic is also from the DWP. An Answer to a PQ in August 2009-I do not have later figures-showed that 48 per cent, or nearly half, of all those receiving local housing allowance had, on average, a shortfall of £23 a week. This was because their contractual rent was higher than their HB. Some will have been in work, others on income support and so on. I do not know how they made ends meet. For those in shared accommodation, paying single-room rent, the HB research for the DWP showed that 87 per cent of young people faced a shortfall, on average, of £35 a week. I dread what will happen now that we propose to raise the age at which single-room rent can be claimed from 25 to 35. I repeat: 48 per cent found that their HB did not cover their rent. If the Minister is right and their HB then did not press down on their contractual rent-however much the tenants would have wanted and needed it to-why does he think now that by cutting HB 18 months later he will press their contractual rent down? It is a triumph of hope over history. It was not happening 18 months ago and landlords tell us that it will not happen this time either. SSAC confirms this. Nine in 10 landlords will avoid anyone on HB. Why? Because they can now let to other people at the rents that they seek to charge. In other words, the Government do not control, as they believe they do, the rents of the private rented sector. It is a fallacy. Indeed, preliminary findings from current research suggest that, whether housing benefit claimants account for 20 per cent or 70 per cent of the private rental market, it makes no difference at all to local rent levels. HB levels, and therefore the Government, do not shape the market, full stop.

8.30 pm

Why is that? It is because it is a landlords' market and not a tenants' market; it is, therefore, not a Government's market and not a HB market. Surveyors, letting agents and estate agents are reporting gazumping, six to eight tenants after every property and sealed-bid rent offers. The British Property Federation tells us that 150,000 extra tenants will enter the private rental sector next year, pushing up rents even further. Even where landlords in the past might have accepted some limitation of their rents if they were gaining capital growth, this, too, is no longer the case. Those on current HB levels struggle to find a home. What will happen?

Like the noble Lord, Lord German, I want to talk a little about the situation outside London. I have no doubt that the situation in London is harshest because rents are highest, but some of the Government's proposals-the move to the 30th percentile, the threat to those on JSA and requiring single people up to 35 to share a house with others-will have a severe

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effect on those outside London. Only the first of these-the rents covered by HB to be reduced from the 50th percentile to the 30th percentile-is in these regulations, but they affect 83 per cent of those on LHA, 40,000 of whom will lose £20 and more per week as a result of that change. What does that mean? It means that instead of HB ensuring that private tenants can afford 50 per cent of properties, they will be able to afford only 30 per cent of properties.

But it is worse than that. Benefits, we are told, including HB, will in future increase by CPI. CPI includes only 6 per cent for rent-rather less, I think, than is allowed for restaurants and cafes. It is not a sensitive indicator. What does that mean for these regulations? Let us look again at history, rather than relying on hope. In the last decade for which we have statistics-1997 to 2007-CPI rose by 20 per cent and rents by 70 per cent. In each year, CPI was outpaced by 5 per cent a year. Project that forward-indeed, this very weekend Savills has reported that it expects rents to increase by 7 per cent next year, 6.5 per cent the year after and 5.5 per cent the year after that. HB, instead of covering the 30 per cent of properties that the Minister proposes, will, the following year, on Savills's figures, cover only about 25 per cent of properties, the year after 20 or 21 per cent and the year after that-on a smaller base-some 15 per cent. Within five years, only 10 per cent of properties will be affordable on HB if these proposals continue. Even if a few landlords accept reduced rents in year one to avoid voids or because they rate the quality of their tenants and so on, they will not be able to afford to do so in year two, year three or year four as the gap between the rent levels chargeable and CPI and HB widen. In some places where there is even higher demand, it is likely that HB will cover few, if any, properties. It is estimated that by 2020 not a single two-bedroom flat in Manchester will be available for rent. We know the quality of what will be left.

The Minister places much weight, I suspect, on the discretionary housing payments. My authority-Norwich-had £29,000. It ran out in November this year. The calculations are that, even with the tripling of the sum to some not-very-generous £60 million, it will barely help 6 per cent of those on housing benefit.

I want the noble Lord, Lord Freud, to do two things today. First, I want him to give the House an assurance that every two years the local housing allowance figure will be recalculated to reflect the 30th percentile rents and not be allowed to drift lower in line with the CPI. If the Government believe that from October this year 30 per cent is the right figure, they cannot also believe that the right figure in two years' time will be 20 per cent. I am sure that the noble Lord, Lord Freud, who is an honourable man, will want to hold firm to his policy intention. That means rebasing the figure at least every two years. I want a commitment, please.

Secondly, like many other noble Lords, I want the Minister to keep his policies under review. I am sure that he will say, as I would have done in his place, "We always keep everything under review all the time". However, precisely because the Social Security Advisory Committee regards these policies as high risk and deeply undesirable, we need a report published along

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the lines outlined by the noble Lord, Lord Best. If the Government are right, they have nothing to fear from the noble Lord's Motion. If the Government are wrong, the distress caused to thousands of families with children will not bear thinking about.

Perhaps I may say one final word to the noble Lord, Lord Freud. The policies of his right honourable friend Mr Pickles will undermine much of what the noble Lord seeks to achieve. Mr Pickles proposes that almost all social housing new build will come from the revenues from increasing rents for new tenants to 80 per cent of market levels in new builds and re-lets. Yet almost every new tenant coming into my housing association is on HB. Indeed, the only sensible strategy for housing associations is to ensure that those who will always remain on benefit-including low-income pensioners, those with disabilities and those always marginal to the labour market-go into the most expensive intermediate-rent properties, because HB will cover the bill, while those who hope to get back into work go into the cheaper properties, where HB is less of a barrier, because you need cheap rents if you are to get back into work. This is perverse. Those who seek to help themselves need to live in the cheapest property, because only in that way can they spring the housing benefit trap. Mr Pickles's policies will undermine the universally credited project of bringing people back into the labour market.

What about the benefit bill? That, too, will soar, thanks to Mr Pickles's proposals. Inside Housing, a magazine that I am sure the noble Lord, Lord Freud, reads, has calculated this weekend that, instead of housing benefit being cut by £2.26 billion, as the DWP hopes, footing the HB bill for Mr Pickles's intermediate rents will actually force the HB bill to increase by £1.56 billion. The DWP's benefit bill will be paying for Mr Pickles's capital programme. It is a brilliant policy.

In the light of this perversity, there will be worse housing for private tenants, reduced stock for private tenants and deep financial hardship for private tenants, yet there will be increased housing benefit bills, along with reduced incentives to work. This set of policies is an indecent mess, in which the bill, not just in money, but in hardship, stress, grief and distress, will be paid by many thousands of families in this country. I hope that the noble Lord, Lord Freud, will accept the Motion in the name of the noble Lord, Lord Best. I hope, too, that the Minister will, when we consider the welfare reform Bill, be able to accept amendments that will tackle some of the dreadful implications and the false premises that lie behind this strategy.

The Earl of Listowel: My Lords, I know that everyone is waiting for the Minister's response to this debate, so I will be brief. I support my noble friend Lord Best's Motion, and wish to speak on two issues. One is the availability of social housing and the other is the child protection issue, raised by the noble Lord, Lord Knight, my noble friend Lord Adebowale, and other speakers. I join the consensus of concern in this area.

The noble Lord, Lord German, raised the question of the availability of social housing. Most of us can agree that it is a tragedy that in this country we have failed to invest in good social housing for our people. I visited recently in Walthamstow a mother with a young,

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six week-old infant who was sharing the house, the bathroom and the kitchen with five other households. We have let such families down badly. I have visited private housing which is being used to fill the gap in Redbridge and some of it is of appalling quality. We have let these families down by not investing and not thinking strategically about securing sufficient social housing supply. The concern, in a sense, is that this will add insult to injury: we have let these families down and we may yet let them down further. I strongly support my noble friend in his call for a considered assessment of the impact of this change.

The noble Lord, Lord Knight, spoke about the impact on children's services of the migration of families from one area to another. Among other local authorities, he mentioned Haringey. Your Lordships may recall from the report of my noble friend Lord Laming into the death of Victoria Climbié what he discovered about the state of the social services department in Haringey. Among other things, there was a shortage of social workers and a high number of unaccompanied asylum-seeking children entering the local authority, putting an additional and unexpected burden on the children's services. Social worker managers said that it became like a service production line. Social workers were overloaded and Victoria Climbié's social worker, Mrs Arthurworrey, had far above her maximum case load. This was the context of what happened to Victoria Climbié and the terrible fate that befell her. I urge your Lordships not to forget what happened in that case.

It would serve the Government's interests well if they were to consider carefully the impact of these changes on children's services. If something goes wrong and children's services become overburdened and social workers cannot answer the needs, the media will understandably be very scathing about what they see as the roots of such problems. It might be unhelpful to the Government in the longer term if it seems that the policy on which they are now embarking might lead to the failure of services and the death of a child or some other outcome. I strongly support my noble friend's Motion and I look forward to the Minister's reply.

Baroness Turner of Camden: My Lords, it may not be part of our convention to challenge regulations in this way but we are not living in conventional times. We are faced with a determined attempt by the Government to undermine the welfare society with which we have lived since the end of the last war and to replace it with something called the big society-hence the attempt to change benefit provision without regard to what this will mean for many vulnerable people.

This is the case with housing benefit. Many people have been kept from desperate poverty and even homelessness by the existence of this benefit. Among them are many single parents, mostly women, and it is surely in our interests that such women should be able to bring up and support their children. Often they have poorly paid part-time jobs and some of the difficulties that such women and their families face have already been demonstrated to us very dramatically by one of the previous speakers in the debate.

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I am a Londoner and I believe that London is a special case. The mayor may have been attacked for some of the statements he made-he was regarded as having over-reacted-but, on the other hand, he has a point. There are many areas of London, including the one in which I live, which have changed dramatically in the past 20 or 30 years. They have been developed and upgraded. I have lived there for 40 years, and it was relatively inexpensive when I moved there, but it no longer is. It is desperately overpriced. Rents are impossible, except for well-off people.

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